Friday, September 21, 2018

Carlyle Group Sniffing Airplane Parts Maker Esterline

Dealreporter stated The Carlyle Group is one potential buyer for Esterline.  Esterline supplies airline parts.  It's 2017 Annual Report noted:

Our products are used on the majority of active and in-production U.S. military aircraft and on every Boeing commercial aircraft platform manufactured in the past 75 years.
Do Carlyle's politically connected founders know war is in our future?  If so, Esterline could be a wise investment.

Boeing may not be thrilled about Carlyle buying a key supplier after affiliate Vought Aircraft Industries' South Carolina operation gunked up 787 Dreamliner production as Conde Nast reported in 2009.

But Boeing didn’t realize that the Carlyle Group, which had acquired Vought in 2000, was starving it of resources while making a few cosmetic improvements to attract potential buyers—a once-common private equity tactic. By early 2006, Vought was facing a severe “liquidity crisis” and nearly went bankrupt, chief executive Elmer Doty told analysts. It couldn’t afford the new plants, employee training, and fuselage design and assembly and had to “reconstitute” its engineering department. “We are among the riskiest, if not the riskiest” of the Dreamliner suppliers, Doty acknowledged.
Mr. Elmer L. Doty remains with Carlyle and could advise Esterline on how much cash Carlyle plans to bleed from the company if it is the successful bidder.