The Carlyle Group is exploring a sale of Brintons', the storied British carpet maker. Carlyle hired William Blair to auction Brintons' five years after acquiring it for £38 million out of liquidation. The story did not say how Carlyle put Brintons' in liquidation by buying company debt on the cheap. The Brintons' family leveled about their unfair treatment by Carlyle.
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.
By using a pre-pack to acquire the business, Carlyle was able to jettison Brintons' pension fund – complete with its £10.5m deficit.
I expect the family to be knotted and tufted about Carlyle's plans to get over £200 million from the sale. The sixty five Brintons' employees laid off in February 2016 might be frosted about Carlyle's huge payday after theirs was eliminated.
Carlyle dumped Brintons' pension responsibility on the public Pension Protection Fund. How much will they get from Carlyle's monstrous profits on Brintons' sale? Nothing, nada, zippo. Auctioneer William Blair will get more than the Pension Protection Fund.
Carlyle promotes how they are the solution for underfunded pensions. Just not Brintons', a five year PEU bled affiliate.
