CNBC reported:
Paradigm Precision, which Carlyle has been growing for about a decade, didn’t attract high enough bids as the private equity firm had hoped because of the 737 Max crisis, said the people, who spoke on condition of anonymity because the discussions were private.Moody's placed the company on review for downgrade in December.
The review follows last week's announcements by Boeing and Spirit AeroSystems that production on the 737 MAX program and aircraft deliveries related thereto will cease effective January 2020, and reflects the anticipated negative impact of this unexpected development on TurboCombustor's near-term liquidity profile, particularly in consideration of the company's near-term debt maturities (albeit in the context of a relatively moderately levered balance sheet) that will have to be refinanced prior to December 2020. Moody's expects broad-based operational disruption to ripple through much of the global aerospace supply chain given the high-volume and large participation of companies attached to the MAX program, with heightened financial risk for TurboCombustor given its weak free cash flow profile and a high degree of concentration on the LEAP-1B engine which powers the MAX (estimated to be about 20% to 25% of total sales). Moody's noted the heightened risk that even reduced MAX volumes -- if production resumes -- would negatively impact TurboCombustor's earnings and cash flow profile and constrain near-term liquidity.
The company received nearly $4 million from Florida entities to add 200 jobs. Moody's downgraded the company in 2015.
Carlyle won't get to add TurboCombuster, dba Paradigm Precision to its recent list if blockbuster sales. Debt refinancing looms for this PEU affiliate.
Update 12-7-22: Carlyle announced it is offloading TurboCombuster dba Paradigm Precision to CDR and Greenbriar. The deal is expected to close in early 2023.
