Thursday, October 28, 2010

It's a Carlyle Siniverse

The Carlyle Group announced its second purchase of a telecommunications manufacturer.  The two deals include a $3.9 billion buyout of CommScope and a $2.6 billion takeover of Syniverse, totaling $5.5. billion.  Marketwatch reported:

Syniverse provides a full portfolio of mobile roaming, messaging and network solutions to more than 800 mobile operators, cable and Internet providers, and enterprises in over 160 countries.
The Carlyle Group had to do something with their mountains of cash, driven by mass monetizations in the last year.

Carlyle officials referred to Syniverse's role in the "mobile global ecosystem."   That's not your father's ecosystem, which actually involved nature.    Both CommScope and Syniverse have Chinese subsidiaries.  Welcome to Carlyle's siniverse, where words have no meaning, greed is mainstream, China is king and debt is back.

Only in Carlyle's siniverse can a private equity underwriter (PEU) go public and keep its distinctive, competitive advantage (being a private firm). As they did with ecosystem, the siniverse will rewrite "The Goose with the Golden Egg."  Hint:  Carlyle ends up with the gold and fois gras to boot.

Update 10-29-10:  Hawaiian Telecom, Carlyle's failed telecom investment, emerged from bankruptcy, as the PEU made new investments in the space.

Update 3-9-12:   Carlyle's buyout enriched the top two managers at Syniverse.  Higher interest expense, up over 320%, and management fees of $3.7 million helped turn Syniverse into unprofitable territory.

Update 11-30-14:  It's layoff time for Syniverse employees in Tampa, Florida.  I doubt their exit packages are near former CEO's Jeff Gordon.