Exclusive: Carlyle eyes picking IPO banks in next month: sources

NEW YORK Wed Jun 1, 2011 8:07am EDT

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NEW YORK (Reuters) - Carlyle Group CYL.UL is looking to pick banks to underwrite its planned IPO in the coming month, four sources familiar with the situation said, making it the latest buyout firm to tap the public markets.

Carlyle, which is gearing up to join publicly traded rivals Blackstone Group (BX.N), Kohlberg Kravis Roberts & Co (KKR.N) and Apollo Global Management (APO.N), hopes to file its IPO prospectus with the U.S. Securities and Exchange Commission in the third quarter, two of those sources said.

The sources, who spoke on Tuesday, declined to be identified because the process is not public. Carlyle declined to comment.

Private equity firms had seen the value of their portfolio companies diminish and their ability to strike new deals evaporate in the wake of the credit crisis. However, the outlook for both selling portfolio companies and striking new deals has since improved.

Publicly traded shares can help a company incentivize employees and provide a currency for acquisitions.

If Carlyle were to file for an IPO in the third quarter, it could realistically price an offering and begin trading some time after the September U.S. Labor Day, but before the December holiday season starts.

If it misses that window, it could wait until early 2012, after it finalizes its full-year 2011 financial statements.

A source previously told Reuters that Carlyle could file for an IPO this year. Sources also previously said that bankers were holding discussions with Carlyle about going public.

EXPANDING BUSINESS MODEL

Carlyle, which has invested in companies including Dunkin Brands, Alliance Boots and Freescale Semiconductor, has been expanding its business model. In January, it struck a deal to buy Dutch-based private equity fund-of-funds AlpInvest Partners, Europe's largest, to bulk up its product menu and attract more money from investors.

The firm, founded in 1987, has assets under management of more than $106.7 billion according to its website. In February, Carlyle hired NASDAQ OMX Group Inc (NDAQ.O) Chief Financial Officer Adena Friedman as its CFO.

Blackstone Group blazed the trail for private equity firms going public in 2007 with its own high profile IPO -- timed just before the market started to collapse.

Alongside it were hedge funds Och-Ziff Capital Management Group LLC (OZM.N) and Fortress Investment Group LLC (FIG.N) which all made their debuts on the New York Stock Exchange in the space of a year.

Rival buyout firms such as Apollo and KKR, which had also been planning to list, watched in the wings as their chance evaporated.

Since the economy and market started recovering, private equity firms have started looking again at going public.

KKR, which originally filed for a U.S. IPO in 2007, listed in Amsterdam instead. It moved its shares to the New York Stock Exchange in July. Apollo listed on the NYSE in March.

(Editing by Dhara Ranasinghe and Muralikumar Anantharaman)

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