Tuesday, November 22, 2011

Brintons Backdoored by Carlyle (Before Mrs. Fields)

The Telegraph finally sniffed The Carlyle Group's "purchase" of Brintons, a British carpet maker and found it PEU worthy.  It reported:

Rather than buying the family's equity stake, Carlyle bought the company's debt (at a discount to its face value, no doubt). Once they had acquired the debt Carlyle then used a controversial pre-pack administration to seize control – placing the carpet-maker into administration, then buying it straight back. 
Carlyle used debt holdings to take over Brintons, a strategy recently used on Mrs. Fields.  In the move, Carlyle dumped Brintons' pension, closed factories and cut jobs, all to "save the company."

The descendants of the founding Brinton family accused Carlyle of breaking a string of promises to gain control.

Carlyle doesn't promise.  It offers "puffery," at least that's Carlyle's defense when challenged in court.

Don't worry, descendents can buy back the firm in two years for double Carlyle's takeover costs and after a huge dividend bleed.  It's a PEU world, where greed matters.

Update 11-29-11:  Black Cab hired an ex-Brinton's director.