Friday, December 6, 2013

Carlyle Group's Planned Cash-Ins

Seeking Alpha identified Carlyle's efforts to cash in on two affiliates, PQ Corp and CVC:

Sources tell Reuters Carlyle (CG) is preparing to either sell specialty chemical maker PQ Corp. for up to $3B (after factoring debt), or take it public.  Carlyle paid $1.5B to acquire PQ in '07. Since then, the company has been merged with industry peer INEOS Silicas, and has shed its engineered glass products busines (Potters Industries).   PQ is estimated to have annual EBITDA of $300M.Carlyle will reportedly talk with banks next week to select IPO underwriters for PQ, but will simultaneously continue exploring a sale.

"If they thought the moment for an IPO last year was unfavorable [last year], maybe now things are just as bad, or even worse, which will probably have quite an impact on the demand," says analyst Rodolfo Amstalden of Carlyle Group's (CG) plan to revive the offering of Brazilian travel agency CVC Brasil Operadora e Agencia de Viagens SA.  The offering will try and raise up to $418M and would be just the 10th this year in Brazil, which is the world's worst-performing major stock market in 2013.  Hurting the IPOs prospects even more - its purpose is to allow Carlyle (a 63% owner) and other investors to cash out, rather than the company raising money.  The 2014 World Cup and 2016 Olympics can't come fast enough for the slumping economy and market.
Any S-1's would provide information on Carlyle's management fee and dividend bleeding of both companies under PEU ownership. Any sales to fellow private equity underwriters would keep this information under wraps.