A corporate news release stated:
Triumph Group, Inc. (NYSE:TGI) today announced a public offering of its common stock. The size of the offering is 2,500,000 shares of common stock offered by investment funds associated with The Carlyle Group. Upon completion of the offering, investment funds associated with The Carlyle Group will own approximately 20% of the common stock of Triumph Group. The offering is expected to close and settle on May 25, 2011. The company will not receive any of the proceeds from the offering of shares by the selling stockholders.Carlyle received 7.5 million shares of Triumph Group stock and $525 million in cash for Vought Aircraft Industries. They plan to sell 2.5 million, or a third of their holdings. That's $236 million at today's closing stock price
Two oddities are associated with Carlyle's latest cash in. The first is Carlyle hoped to take Vought public in summer 2008, filing an S-1 just months before the September financial meltdown. Obviously, Vought's IPO didn't fly given Lehman's implosion. It took two more years for Carlyle to sell Vought to Triumph.
The second oddity comes from Triumph's SEC filings. They show Carlyle with only 5 million shares, not the 7.5 million exchanged in the sale.
DBD investors V, L.L.C.(11) c/o The Carlyle Group 1001 Pennsylvania Avenue, N.W. Suite 220 South Washington, DC 20004-2505 | 5,046,775 | ----20.9% | |||||
BlackRock, Inc.(12) 40 East 52nd Street New York, NY 10022 | 1,721,383 | 7.1 | % | ||||
All executive officers and directors as a group (13 persons) | 623,991 | 2.6 | % |
One might expect Triumph to know who holds their stock, especially a loose 2.5 million shares held by their largest holder. Triumph shows Carlyle with 20% of the company, the same ownership percentage they claim Carlyle will hold after the public offering. Who has the 2.5 million shares and why weren't they previously reported?
Here's a clue as to how PEU's operate (from Triumph's description of Carlyle's holdings):
- (11) Information is based on a Schedule 13D filed by DBD Investors V, L.L.C., TCG Holdings II, L.P., TC Group Investment Holdings, L.P., TC Group III, L.L.C, TC Group III, L.P., Carlyle Partners III, L.P., CP III Coinvestment, L.P., TCG Holdings, L.L.C., TC Group, L.L.C., TC Group II, L.L.C., Carlyle Partners II, L.P., Carlyle International Partners II, L.P., State Board of Administration of Florida, Carlyle-Aerostructures Partners, L.P., CHYP Holdings, L.L.C., Carlyle-Aerostructures Partners II, L.P., C/S International Partners, Carlyle-Aerostructures International Partners, L.P., Carlyle-Contour Partners, L.P., Carlyle SBC Partners II, L.P., Carlyle International Partners III, L.P., Carlyle-Aerostructures Management, L.P., Carlyle-Contour International Partners, L.P., and Carlyle Investment Group, L.P. on June 28, 2010. The Schedule 13D reports that on June 16, 2010, (a) DBD Investors V, L.L.C. had shared voting power and shared dispositive power over 5,046,775 shares, (b) TCG Holdings II, L.P. had shared voting power and shared dispositive power over 5,046,775 shares, (c) TC Group Investment Holdings, L.P. had shared voting power and shared dispositive power over 5,046,775 shares, (d) TC Group III, L.L.C. had shared voting power and shared dispositive power over 5,046,775 shares, (e) TC Group III, L.P. had shared voting power and shared dispositive power over 5,046,775 shares, (f) Carlyle Partners III, L.P. had shared voting power and shared dispositive power over 4,896,850 shares, (g) CP III Coinvestment, L.P. had shared voting power and shared dispositive power over 149,925 shares, (h) TCG Holdings, L.L.C. had shared voting power and shared dispositive power over 2,286,283 shares, (i) TC Group, L.L.C. had shared voting power and shared dispositive power over 2,286,283 shares, (j) TC Group II, L.L.C. had shared voting power and shared dispositive power over 1,359,785 shares, (k) Carlyle Partners II, L.P. had shared voting power and shared dispositive power over 640,494 shares, (l) Carlyle International Partners II, L.P. had shared voting power and shared dispositive power over 539,452 shares, (m) State Board of Administration of Florida had shared voting power and shared dispositive power over 248,846 shares, (n) Carlyle-Aerostructures Partners, L.P. had shared voting power and shared dispositive power over 199,994 shares, (o) CHYP Holdings, L.L.C. had shared voting power and shared dispositive power over 181,827 shares, (p) Carlyle-Aerostructures Partners II, L.P. had shared voting power and shared dispositive power over 153,193 shares, (q) C/S/ International Partners had shared voting power and shared dispositive power over 121,633 shares, (r) Carlyle-Aerostructures International Partners, L.P. had shared voting power and shared dispositive power over 79,395 shares, (s) Carylyle-Contour Partners, L.P. had shared voting power and shared dispositive power over 34,765 shares, (t) Carlyle SBC Partners II, L.P. had shared voting power and shared dispositive power over 29,193 shares, (u) Carlyle International Partners III, L.P. had shared voting power and shared dispositive power over 29,013 shares, (v) Carlyle-Aerostructures Management L.P. had shared voting power and
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shared dispositive power over 19,859 shares, (w) Carlyle-Contour International Partners, L.P. had shared voting power and shared dispositive power over 8,001 shares, and (x) Carlyle Investment Group, L.P. had shared voting power and shared dispositive power over 621 shares. The address of DBD investors V, L.L.C. is c/o The Carlyle Group, 1001 Pennsylvania Ave. NW, Suite 220 South, Washington, D.C. 20004-2505.
Investors associated with the Carlyle Group will sell a mystery 2.5 million shares, thereby pumping up Carlyle's financials for their looming IPO.
Number of Triumph shares issued to Vought shareholders | 7,496,165 | |||||||
Triumph share price as of the acquisition date | $ | 67.35 | $ | 504,867 | Triumph common stock | |||
Cash consideration transferred to Vought shareholders | 547,950 | Cash | ||||||
Total fair value of consideration transferred | $ | 1,052,817 | ||||||
The Triumphant DBD's win again with a one year 40% return on Triumph stock. Will Carlyle's Big Three refund Texas taxpayers, badly in need of state revenue? Doubtful.
Update 5-20-11: Triumph announced to public offering would price at $92. 75 per share.
Update 5-31-11: CityBiz List missed the above story, but noted DBD Investors V is down to 3.33 million. shares
Update 6-10-11: Triumph declared a stock split, while holding their dividend steady. This effectively doubles Triumph's annual dividend expense. Carlyle's 20% ownership will double to 10 million shares, producing $800,000 in annual dividends.
