Nielsen Accussed of PEU Ethics

Courthouse News Service reported:

Nielsen, a "once-noble company," colluded with a former competitor to publish ratings data that had been corrupted by a bribery scheme, a New Delhi-based broadcaster claims in a $580 million lawsuit.

Corrupted, bribery, collusion...those are historical PEU attributes.   Nielsen's PEU owners included KKR, The Blackstone Group, The Carlyle Group, Thomas H. Lee Partners, Alpinvest Partners, Hellman & Friedman and Centerview Partners.

PEU's Deserve Better

Carlyle Group co-founder David Rubenstein lamented the trashing of private equity underwriters in the Presidential political campaign on CNBC. 

the (PEU) industry “deserves better defense than what we’re getting” from US public officials

Elected officials have two distinct audiences, those providing money for political campaigns and those likely to vote in elections.

PEU's deserve better as they provide campaign cash.  It can come straight from a billionaire to a 529 organization, originate from the PEU's political action committee, be laundered through an affiliate's PAC or come straight from the personal account of a PEU.

President Obama loves PEU's behind closed doors, while Mitt has PEU blood.  Once the election is over Red and Blue cater to PEU's.  Rubenstein is well aware of this, given Carlyle's base is Washington, D.C.

Carlyle's Distressed IMO Carwash Bid

Rothschild ran an auction for The Carlyle Group's IMO Carwash, which TDR Capital LLC won.  Carlyle and TDR entered negotiations on IMO Carwash, which Carlyle acquired in 2006 from JPMorgan Partners, a frothy time for private equity underwriter (PEU) acquisitions.  Carlyle loaded IMO Carwash with debt, £355 million in 2009, the year it stuck it to lenders:

The sponsor (Carlyle) wants senior ranking creditors to cut their debt claims by a third and junior creditors to write off all their debt, in exchange for equity stakes.

Unlike what Carlyle did to Mrs. Fields or Brintons, IMO's creditors and a London bankruptcy judge played along, enabling The Carlyle Group to retain control.  Nearly half of IMO's debt turned to equity,  £185 million at present.

TDR Capital treated IMO Carwash like the distressed investment it is.  Carlyle refused TDR's bid and will go to the debt market for refinancing.  Carlyle has billions in dry powder.  If no Carlyle fund will provide credit, IMO's truly a PEU.

Update 7-30-12:  I wondered how Carlyle retained control of their bankrupt affiliate.  Apparently, Carlyle did not cram itself down.  Bloomberg got fooled by the Sunday Telegraph, as did I.

Hirschfeld Industries Virtual Nonprofit Like Carlyle Group

In our PEU fractal world patterns repeat themselves at varying levels.  Two private equity underwriter (PEU) IPO filings revealed the extent to which the greed/leverage boys avoid taxes.  On a national level The Carlyle Group paid a miniscule tax rate.  That pattern repeated locally with Hirschfeld Industries, an affiliate of PEU Insight Equity. 

I wonder if PEU insider Josh Lerner will study this phenomenon at his Private Capital Research Institute.  Doubtful. 

I'm glad Josh didn't steal my trade moniker for the industry, Private Equity Capital Knowledge Executed Responsibly (PECKER). It fits.

PEU Economic Net Income Redefined

Private equity underwriters (PEU's) use economic net income, a nonstandard measure when reporting earnings.  It purports to reflect profitability by estimating "profits" from sold and unsold investments.  Blackstone adjusted the vaporware number, in part to show greater earnings.  WSJ reported:

There is one thing to look out for in the firms’ 10-Qs this time around: economic net income, a widely-used performance benchmark for alternative asset managers. For the second quarter, Blackstone excluded the provision for income tax in its ENI, so that the number reflected economic income. It did, however, account for the impact of actual income tax.

 

Someone close to the matter said Blackstone made the change in part because of advice of analysts who cover the firm. The analysts said inclusion of tax provision inflated the taxes, and that including only the actual tax better reflects the firm’s true earnings, the person said.

Are PEU analysts now setting accounting standards? 

IRS Doesn't See PEU People

Tax Analysts reported:

A growing class of business entities - from investment funds like the Carlyle Group to private hedge, private equity, and venture capital funds - largely escape IRS audits due to their forms of organization.

Large, widely held partnerships, including publicly traded partnerships (PTPs) - which generally have thousands of direct and indirect partners - seem largely to escape the scrutiny that the Service gives to their C corporation counterparts.

PTPs (such as oil and gas and real estate funds and investment funds like the Blackstone Group LP, the Carlyle Group LP, and KKR & Co. LP) aren't the only lucky ones," she writes. "While private hedge, private equity, and venture capital funds might not be widely held in terms of the number of direct partners, if one of their investors is a fund of funds, the number of indirect partners balloons.

The Carlyle Group employs former IRS Commissioner Charles Rossotti.  Private equity underwriters (PEU's) are a key link in the chain of the Government Corporate Monstrosity, Eisenhower's Military-Industrial Complex on trillions in federal steroids and billions in tax breaks.  The IRS doesn't see PEU people.  That goes for Red and Blue versions. 

Carlyle's Energy Mezzanine Opportunities Fund-A in Caymans

WSJ reported:

Carlyle Group has raised more than $512 million so far for its first mezzanine energy fund, according to regulatory filings.

Filings have been posted this year for three distinct entities, but they actually constitute capital raised for a single debut mezzanine energy vehicle, Carlyle Energy Mezzanine Opportunities Fund LP, according to a person familiar with the matter. The total amount raised is now greater than the $512.8 million combined total of those filings, he said.

SEC filings show the three entities, all in DC:

0001509539	Carlyle Energy Mezzanine Opportunities Fund, L.P.	DC
0001509538	Carlyle Energy Mezzanine Opportunities Fund-A, L.P.	DC
0001553963	Carlyle Energy Mezzanine Opportunities Fund-Q, L.P.	DC

The first fund listed started with a minimum investment of $1.5 million.  Fund A, with a minimum investment of $5 million,  is incorporated in The Cayman Islands:

Fund Q had a minimum investment of $200 million, which is the rumored amount invested by Pennsylvania Public School Employees’ Retirement System.  That March investment turned into a June deal on a Philadelphia refinery, with layers of government subsidy. The White House effectively brokered the deal.

Philadelphia freedom includes off-shoring profits.

China to Backdoor PEU Investments via GM Pension

One tentacle of China's government will buy up to $2 billion in private equity underwriter (PEU) investments from General Motor's pension fund.  Ironically, GM CEO Daniel Ackerson worked as a Managing Director for The Carlyle Group.

GM needs to reduce its pension liability.  In a PEU-like move, GM announced in June it would offer employees a lump sum buyout.  The move is expected to reduce GM's pension obligations by $26 billion.  The company will effectively contract out its pension function.  It will pay Prudential for a group annuity contract for employees not taking the buyout.

GM will shift $29 billion of $109 billion in pension assets to Prudential.  Did Prudential hold their nose on taking GM's PEU holdings?  Or is this simply a re-balancing in the remaining portfolio after a major move?  Only the people not talking know for sure.

GM loved PEU's for a decade and a half.  They hired one to be their CEO.  GM is but the latest middleman in moving PEU stakes.  It's China's backdoor gain of U.S. assets.  Will it garner a CFIUS review under Tim Geithner's Treasury?  It's a global PEU world.

Hirschfeld Industries PEU Owned

While researching Hirschfeld's buyout of Martifer's stake in their wind tower joint venture, I ran across Hirschfeld's private equity underwriter (PEU) connections.  Insight Equity invested in Hirschfeld Industries in 2006:

Insight brings its money into the new company, expecting a payout on its investment years later.

How did Insight live up to this representation?  Here's the payout Insight took from Hirschfeld after taking a controlling interest in April 2006:

April 2006-December 2006-$6.7 million in partnership distributions

Year ended December 2007-$47.8 million in partnership distributions

Year ended December 2008-$28.2 million in partnership distributions

Nine months ended September 2009-$15.2 million in partnership distributions

Hirschfeld's PEU owners pulled $97.9 million from the firm, splitting it mostly 50-50.  A 51% cut of $98 million is $50 million. 

Despite this cash bleed Insight turned around the firm in award winning fashion:

SOUTHLAKE, TEXAS, September 8th, 2008 – Insight Equity Holdings, LLC (“Insight”), is proud to announce that they have been honored by the Turnaround Management Association (TMA) as 2008’s Mid-Sized Company Turnaround of the Year for the acquisition and enhancement of Hirschfeld Steel Group, a premiere fabricator of structural steel for bridges, stadiums, mass transit structures, industrial facilities and other industrial and commercial projects. Insight acquired Hirschfeld Steel Group, based in San Angelo, Texas, in April 2006. 

Insight issued this press release on September 8, 2008.  A week later Lehman Brothers failed and Merrill Lynch ran into Bank of America's arms. The financial crisis sent investors running from equities. 

In June 2009 Insight pulled a signature PEU move, a dividend recapitalization, where debt is added to fund a PEU owner dividend. 

Insight Equity Holdings LLC (“Insight”), the Dallas, Texas-area private equity firm, has completed the recapitalization of Hirschfeld Industries with LBC Capital Partners in conjunction with the incumbent lenders, Bank of America and Wells Fargo Business Credit. Proceeds of the recapitalization will be used to finance a recently executed JV agreement with Martifer Energy Systems to manufacture wind towers in the United States as well as provide a dividend to the equity holders. 

Insight filed for an independent public offering on Hirschfeld Industries in November 2009.  It didn't fly. Hirschfeld's SEC filing did identify a risk:

Limits on our ability to influence or control partially-owned joint ventures or strategic partnerships, such as our wind tower joint venture with Martifer, could restrict the future operations of such joint ventures or strategic partnerships and harm our results of operation. With limited control over the management of our partially-owned joint ventures, we cannot solely dictate items such as dividend or operating policies and strategic partnerships without the cooperation of our business partners in these ventures, such as in the case of our wind tower joint venture and our interest in a strategic partnership that has rights to construct a magnetic levitation rail line between Anaheim, California, and Las Vegas, Nevada. If we and our partners cannot agree on certain business issues, the performance of the ventures may be harmed, and we may not be able to remove cash from such ventures. Our joint venture and strategic partners may have interests that are different from ours and could influence key business decisions that are not in our best interests. Our joint ventures and strategic partnerships may not be successful, including in the event that we do not have a good working relationship with our joint venture and strategic alliance partners.

Note the concern about removing cash from joint ventures. It's important to keep that PEU gravy train going.  As for joint ventures not being successful, demand for wind turbine towers is evaporating in the West Texas heat.  Hirschfeld Wind may soon be Hirschfeld Oil Tank.

Carlyle's PEU Paper on Fiscal Cliff

The Carlyle Group issued a paper on America's fiscal conundrum.  It stated:

The paper says that the best outcome of the current fiscal debate
would be for a comprehensive deficit reduction agreement.

But it adds that it might take the expiration of the Bush era tax
cuts and the imposition of across-the-board spending cuts to compel policymakers to reach a major deficit reduction agreement. 

“The best outcome, therefore, might be the expiration of current
fiscal policies to create real pressure for both parties to work
together and quickly reach a ‘Grand Bargain,’” it says. 

“While the fiscal cliff would be a near-term disaster, an extension
of 2012 fiscal policy that fails to address increasing indebtedness
could actually represent the worst long-run outcome,” it says.

Who makes money in near term disasters?  Those with $40 billion in dry powder, like Carlyle. Carlyle's latest investor presentation showed:

PEU's like to buy low in distressed markets, then flip firms in better times.

Carlyle co-founder David Rubenstein knows how to profit from every aspect of any Grand Bargain.  He also has nearly every politician's ear.     

PEU Jet Fuel

Reuters reported on the current version of the Pentagon's $100 hammer.

The Air Force bought 11,000 gallons of alcohol-to-jet fuel from Gevo Inc, a Colorado biofuels company, at $59 a gallon in a program aimed at proving that new alternative fuels can be used reliably in military aircraft..

Gevo Inc. is publicly traded but major shareholders include private equity underwriters:

PEU's profiting from Gevo's IPO include Sir Richard Branson's Virgin Green Fund and Khosla Ventures.  They took Gevo public in 2011 at $15 per share.  It closed trading today at $4.39. 

Reuters noted the political-corporate connections, but left out explicit PEU links:

Some companies involved in the push to build a biofuels industry have connections to prominent Democratic backers, further raising Republican skepticism of the effort.

Vinod Khosla, whose venture capital firm says it played a central role in funding and developing Gevo's business strategy, has given campaign contributions of $474,534 since 1996, 86 percent of which has gone to Democrats, according to data compiled by opensecrets.org. Khosla's firm owned a 27 percent stake in Gevo as of the company's March federal filing with the Securities and Exchange Commission.

Khosla also has close ties to another venture capital firm whose team includes Al Gore, the former vice president and Democratic presidential candidate in 2000.  Gevo did not immediately respond to queries about what role, if any, Khosla played in helping the firm secure government grants or contracts.

It's America's Government-Corporate Monstrosity,  Eisenhower's Military-Industrial Complex on trillions in federal budget steroids.  One has to win the election to mobilize government business to benefactors.  Red and Blue love PEU.

Update 5-29-14:  Billionaire Vinod Khosla asserts his oceanfront California property goes through any formerly public beach and into the tidelands.

Carlyle to Bleed Booz

The Carlyle Group plans to load Booz Allen Hamilton up with $1.75 billion in debt, with $1 billion of the proceeds paid out as a special dividend.  At the end of this liquidity recapitalization, PEU speak for dividend bleeding, Booz will have a debt to equity ratio of almost 15:1 and negative tangible equity of $1 billion.  

Booz is a huge government contractor, which means Uncle Sam will pick up the tab for Carlyle's subversive cash in.  How do interest costs get passed through the lion's share of Booz' federal contracts?

Bain Capital and KKR led a liquidity recap of giant hospital company HCA.  Uncle Sam pays a portion of hospital capital costs through Medicare & Medicaid.  PEU's are the bane of our existence.

Update 7-15-12:  WaPo came to the rescue on Carlyle's bleeding of Booz.  Nothing to see here folks, but come back in five years to see if Booz is still a going concern.

Less than Straightforward PEU World

The Carlyle Group announced its preliminary 2nd quarter fund valuations.  Carlyle's carry funds dropped 2%.    It came with a massive disclaimer:

The information set forth above provides preliminary estimates and are subject to quarterly review procedures and final reconciliations and adjustments. Actual fund valuations may differ from the estimates reflected in the information set forth above, and such differences may be material. We undertake no obligation to publicly update or review previously reported preliminary performance metrics for our carry funds. While appreciation/(depreciation) in our carry funds is one of the many drivers of performance fees, there are several other factors that impact this type of revenue and these figures should not be construed as an indication of performance fees, or of any other component of our revenues or expenses, for any period. The preliminary carry fund performance metrics reflected in this release are not indicative of the performance of The Carlyle Group L.P. and are also not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group L.P. is not an investment in any of our funds. 

Got that unit holders?  It's the less than straightforward PEU world.

Carlyle's Government Nondebt, Nonequity Capital Injection

Bloomberg reported more details on government financial support for The Carlyle Group's takeover of Sunoco's Philadelphia refinery.

The state will contribute $10 million toward the rail terminal, capable of unloading 140,000 barrels per day by early 2013. That’s part of a $25 million package that includes $15 million to overhaul the plant. The refinery will also be eligible for tax abatements and tax-free bond sales, Governor Tom Corbett, a Republican, said on the conference call. 

It's another link in the chain of the Government Corporate Monstrosity, Eisenhower's Military Industrial Complex on trillions in government steroids.  Nondebt, nonequity capital injections are not available to the common citizen.

Carlyle and company received $2.27 billion in cash from the FDIC for "saving" BankUnited.  That's roughly BankUnited's market value earlier this year.  The GCM works to enrich its members.  Others are free to donate salary and pension benefits to make PEUs wealthier.

Carlyle to Jump to Nearly $300 billion in AUM?

The Carlyle Group is reported to be in the lead to takeover SocGen's asset management division, TCW Group.  TCW managed $128 billion in assets.  Add that to Carlyle's $159 billion in assets under managemen (AUM)t and Carlyle's total AUM is nearly $300 billion.  That would leapfrog Blackstone's $190 billion AUM.  Carlyle could be the first PEU to $1 trillion.

Update 7-31-12:  Pensions & Investments suggested an announcement could come soon on this deal.

Update 12-1-12:  A Federal Court issued an injunction blocking the deal until EIG's rights are arbitrated. EIG is a "spin out" from TCW.

Update 12-17-17:  Carlyle sold nearly half its TCW stake to Nippon Life   Bloomberg quoted a Carlyle exec who stated "This transaction lifted the Sword of Damocles, that constant question with Carlyle: ‘This is private equity. What are you going to do next?"

Update 2-22-18:  TCW responded to a sexual harassment allegation against an executive on the TCW board.

Carlyle Exits 666 Fifth Ave. in Manahattan

The Carlyle Group and its real estate investment partners sold their remaining interest in 666 Fifth Avenue's retail space for $710 million.  Carlyle & company previously sold a portion of that asset for $324 million, making total sale proceeds of over $1 billion.  Carlyle's purchase in June 2008 was valued at $525 million.   Prior to the September 2008 financial crisis, private equity underwriters (PEUs) put up a small amount of equity and financed most of their deals with debt. 

Not counting management fees or special dividends/distributions, Carlyle et al doubled their money in four short years.   I see the shedding of 666 as symbolic given PEUs are the answer to all America's ills.  Carlyle's David Rubenstein saves pandas, rare documents, the Washington Monument and now a Sunoco refinery.  What's next, the National Park Service?  All hail Carlyle and their PEU brethren, one of whom may soon be President.  The 666 label is long gone.

I wonder how private equity made it through the last decade without one 60 Minutes story.  A recent CBS News story missed PEU management fees charged to affiliates.  It's a new day for PEU's who've shed their financial antichrist label.  The global PEU future holds sweetness, butter and light.  Red and blue love PEU.

Update 11-24-16:  The Carlyle Group's investment in 666 Fifth Avenue saved President Elect Donald Trump's son in law Jared Kushner who'd bought the building in late 2007 for $1.8 billion. (Source: Forbes)

Update 1-8-17:  The man Carlyle saved may join the White House team as President Trump's main adviser, the role he played in the campaign.  WilmerHale's Jamie Gorelick, the greed queen of disaster, is on Kushner's side.  Also, Kushner's brother Josh has his own PEU, Thrive Capital, which doubled its investment in Instagram in 3 days.

Carlyle Group & JP Morgan Energy Ventures

Reuters reported The Carlyle Group's deal with JP Morgan on commodity financing with Philadelphia Energy Solutions, Carlyle's new joint venture with Sunoco.

The subtext of JPMorgan's landmark deal to buy crude and sell gasoline for the largest oil refinery on the U.S. East Coast was barely disguised.

In joining private equity firm Carlyle Group to help rescue Sunoco Inc's
Philadelphia plant from likely closure, the Wall Street titan cast its multibillion-dollar physical commodity business as an essential client service, financing inventory and trading on behalf of the new owners.

Reuters summed up the issues with:

JPMorgan deal with Carlyle, Sunoco throws light on Volcker (Rule)
* Proposed rule curbs deals with producers, consumers
* Commodity forwards are swaps by another name - Regulators
* Commodity forwards are not derivatives - Banks

The media missed Carlyle's prior loss of SemGroup, a staid pipeline company, to forward looking contracts.  Over $3 billion in bad bets sent SemGroup into bankruptcy.   Former FBI Chief Louis Freeh conducted the investigation.   Freeh is currently investigating MF Global, purveyors of another deathly trading strategy.  Here's Freeh on SemGroup:

Blackstone had determined that SemGroup had been utilizing a speculative trading strategy, which was referred to as “strangle trades.”

Carlyle knows the risk of forward contracts, however it wants to put as little cash into this deal as possible.  While Carlyle levers PES with debt, JP Morgan can bet on inputs and final product.

JPMorgan will not only provide working capital for the joint venture between Carlyle Group and Sunoco Inc, but will also operate a 'supply and offtake' agreement that has the bank's traders shipping crude oil from around the world to the plant, then marketing the gasoline and diesel it makes.

It's a high-pressure double cracker.  Should it blow, it'll be huge.

After SemGroup blew, Carlyle pled puffery as its defense in shareholders suits.  Behavior under stress reveals character.

Carlyle's PEU Refinery

The Carlyle Group will get a majority stake in Sunoco's Philadelphia refinery with the promise of capital investment.  The new venture will be renamed Philadelphia Energy Solutions.  The deal has plenty of sweeteners:

$25 million in Pennsylvania State grants

The Commonwealth will provide grants to help build a high-speed train unloading facility at the refinery, support a major capital project and upgrade the cracker at the refinery.

Tax exempt financing and other tax saving moves

Officials said they are also moving to include parts of the refinery in the Keystone Opportunity Zone so it can receive tax benefits for new construction.

JP Morgan's working capital assistance

J.P. Morgan Ventures Energy Corporation, will supply the refinery with crude and non-crude feedstocks on a just-in-time basis and will purchase refined products from the refinery for offtake.

Add emission credits, which JP Morgan happens to buy and sell

State and federal environmental regulators have agreed to modify a 2005 consent decree to allow the Philadelphia refinery to receive some of the emissions credits assigned to Sunoco's Marcus Hook refinery, which was shut down in December. Those temporary credits should allow the Philadelphia refinery to more quickly implement its expansion plans.

Union leaders contributed to the deal

The union was to vote Monday night on a new three-year contract that gives Carlyle more flexibility on work rules and pensions.

The White House helped kick off deal discussions:

White House officials also called Carlyle executives..., urging them to talk to Sunoco...

The question is how much capital Carlyle will actually put into this venture? 

The Carlyle Group’s investment will flow directly to the refinery’s balance sheet to fund future capital projects, facility upgrades and enhance the refinery’s working capital. 

Carlyle's equity is coming from two of its funds.

Capital for this investment will come from the Carlyle Equity Opportunity Fund and the Carlyle Energy Mezzanine Opportunities Fund. JPMorgan Chase (NYSE: JPM) has agreed to provide working capital financing for intermediate products owned by the refinery in the form of an asset-backed loan, subject to documentation. 

WSJ painted a different picture of Carlyle's capital:

Carlyle said it will fund improvements at the Philadelphia refinery with money from a small buyout fund and another that invests in debt tied to energy projects.

It sounds like the usual PEU play, a small amount of equity and levered debt, aided by a government nondebt, nonequity capital injection and ample tax avoidance.

Carlyle owned a European refinery company, which it flipped after two years:

Carlyle and Riverstone Holdings LLC in 2005 acquired European refiner Petroplus Holdings AG, reselling it about two years later for five times their original investment, according to people familiar with that deal. 

Carlyle's five bagger set the stage for Petroplus' debt-fueled bankruptcy.  Ironically Petroplus' demise could help Carlyle's latest refinery venture.  

Carlyle is betting it can improve margins partly by taking advantage of a new twist in the energy landscape—the bounty of oil and natural gas unleashed in the U.S. interior in recent years as producers learned to crack open energy-rich shale formations.

Carlyle's wager is a "huge bet" on a continued price difference between U.S.-traded crude-oil and imports from overseas linked to Europe's Brent crude.

Carlyle is betting big on energy, but their equity stake is a fraction of the amount a PEU consortium put into TXU, before renaming it Energy Future Holdings.   KKR & company's hand is dependent on Texas politicians.  How will Carlyle's taxpayer supported bet turn out?  It remains to be seen.

Update 8-21-12:  Carlyle dumped the pension for a 401k.  

Update 12-22-12:  WSJ ran a piece on how politicians helped save jobs via the Carlyle deal.  It mentioned the EPA waiving reviews and the $25 million in state assistance, but none of the other benefits to Carlyle.  

Making Investors Happy!

CFO Journal reported:

Carlyle Group co-founder David Rubenstein told the CFO Network that the private equity firm believes it can still make investors happy even after its lackluster initial public offering last month.

Make investors happy, which ones?  Carlyle suggested in its IPO filings it's first loyalty was to its partner unit investors, not common units.  IPO buyers recently saw Carlyle's units rise above the $22 offering price.

Will common unit holders be invited to the annual Carlyle Group Investors (CGI) Meeting, a longstanding gathering of the world's wealthy and powerful?  Doubtful.

There are multiple ways to please.  Carlyle knows this with their two investments in the luxury women's lingerie market, Brazil's Scalina and Itay's Twin-Set Simona Barbieri.

Might there be a runway at the 2012 CGI?

Update 9-20-12:  Carlyle invested in Penti, a Turkish lingerie firm.  Three's a charm!

Update 9-28-17:  Carlyle appears ready to cash in on Penti.

Update 1-20-18:  Carlyle is considering an IPO for Penti

Update 1-30-20:  Carlyle hired JP Morgan to help sell Twin Set.  

Update 9-28-21:  Carlyle is yet again considering an IPO for Penti.