| NEW YORK, June 27
NEW YORK, June 27 Blackstone Group LP and
Warburg Pincus LLC are among the buyout firms through to the
second round of the auction for Carlyle Group LP's
aerospace communications firm Arinc Inc, several people familiar
with the matter said this week.
Private equity firms Hellman & Friedman LLC, Advent
International Corp and BC Partners Ltd are also participating in
the process, the people said. Meetings with Arinc's management
are under way and no final bid date has been set, they added.
Private equity's strong interest in Arinc offers Carlyle
more options if an attractive offer fails to materialize from an
industry conglomerate, which would be expected to pay more due
to the synergies it can extract.
Rockwell Collins Inc, Lockheed Martin Corp
and Thales SA are currently also participating in the
Arinc sale process, the people said. But General Electric Co
, which was also interested in Arinc, is now out of the
process, the people added.
A sale of Arinc, which Washington, D.C.-based Carlyle bought
in 2007 from a group of U.S. airlines, could fetch between $1.3
billion and $1.5 billion, the people said.
Arinc, Carlyle, Rockwell Collins, Blackstone, Warburg
Pincus, Hellman & Friedman and BC Partners declined to comment.
Lockheed Martin, GE and Advent did not respond to requests for
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 the
defense, government, healthcare, networks and security sectors.
At stake in Arinc's sale is Carlyle's reputation as one of
private equity's most savvy investors in the sector. Its
successful track record includes army vehicle and equipment
maker United Defense Industries Inc, aviation parts distributor
Aviall Inc and aircraft engine manufacturer Avio SpA.
Carlyle tried to sell Arinc in 2010 but abandoned efforts
after industry players 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 addressed this by selling its government consulting
division to Booz Allen Hamilton Holding Corp, another
Carlyle-backed company, for $154 million last year.
JPMorgan Chase & Co and Evercore Partners Inc
are advising Carlyle on Arinc's sale, people familiar
with the matter told Reuters in February.