| NEW YORK, June 4
NEW YORK, June 4 Carlyle Group LP's
aerospace communications firm Arinc Inc has drawn early takeover
interest from industry conglomerates and private equity firms in
an auction that may fetch between $1.3 billion and $1.4 billion,
several people familiar with the matter said.
General Electric Co, Rockwell Collins Inc and
Thales SA are among aerospace companies that have
shown preliminary interest in bidding for Arinc, the sources
said on Tuesday.
Major buyout firms are also evaluating a deal and plan to
make offers by a June 10 deadline for first-round bids, said the
sources, who asked not to be identified because the auction is
Representatives for Carlyle, GE, Rockwell Collins and Thales
declined to comment.
Reuters reported on Feb. 25 that Carlyle hired JPMorgan
Chase & Co and Evercore Partners Inc to find a
buyer for Arinc, which it acquired from six U.S. airlines in
2007 for an undisclosed sum.
The auction comes as private equity funds are flush with
capital and tapping cheap debt financing markets to pay for
assets, creating competition for trade buyers and a robust
auction process for sellers.
Annapolis, Maryland-based Arinc, founded in 1929, designs
systems that help airline pilots communicate with the ground. It
also provides transport communications and systems for defense,
government, healthcare, networks and security sectors.
Carlyle tried to sell Arinc in 2010 but scrapped an auction
after strategic buyers expressed little interest in purchasing
the company as a whole, partly due to concerns over Arinc's
government consulting services, sources said at the time.
Many defense companies had long offered services that
included advising government agencies on programs on which they
ended up bidding, creating conflicts of interest. That prompted
the U.S. Congress to pass a law requiring the Department of
Defense to tighten rules on potential conflicts.
Arinc sold the government consulting division to Booz Allen
Hamilton Holding Corp late last year, getting rid of a
business that potential buyers found unattractive in the
previous auction, sources said.
With the sale, Arinc appears to be a more attractive
takeover target for industry buyers, the people said.