Carlyle to File for IPO at Fraction of 2007 Valuation


As Carlyle Group LP prepares for its I.P.O., the firm is now looking at a market valuation of $7.5 to $8 billion and kicking off its road show as soon as next week.

According to Reuters, Carlyle will sell a 10 percent stake to gain $750 million to $800 million in the IPO. Recently in a Securities and Exchange Commission filing, the firm said it may sell the stake but it was unsure of its expected market value. With Tuesday’s announcement, the value comes in lower than at the height of the private equity industry in 2006-2007 leveraged buyouts, which saw  all-time highs.

The firm also said in Tuesday’s amended prospectus that its overall value for its private equity funds increased about 9 percent in the first quarter while its corporate buyout funds jumped about 8 percent. Also on the rise by 11 percent were real assets vehicles, such as real estate and energy investments.

Drop in Carlyle’s Value

Back in 2007, Abu Dhabi state investment firm Mubadala bought a 7.5 percent stake in Carlyle for $1.35 billion, giving the firm an $18 billion value.

Also at that time, The Blackstone Group L.P. (NYSE:BX) raised about $7 billion for its IPO by selling a 24 percent stake valued at an estimated $29 billion value. Since, Blackstone with its $166 billion under management at the end of last year, currently has a market capitalization of $16.5 billion.

Differences between the two firms’ valuations comes from the variances in asset management figures, challenges from placing a value on private equity firms and the diversity of a firm’s business.

Carlyle Joins the IPO Party

Carlyle is join one of many private equity firms that has jumped on the public company wagon lately. In 2010, KKR Financial Holdings LLC (NYSE:KFN) transferred its listing to New York from Amsterdam, with 30 percent of its shares now listed there according to Reuters.

Last year, Apollo Global Management, which has about 15 percent of its shares publicly listed, raised $382.4 million through the issuance of new shares from its IPO.

For Carlyle, they will have help from 21 banks to market its IPO to investors. The firm plans to issue new equity in the upcoming offering. While the firm’s three founders won’t line their pockets with cash from the IPO, the incoming money will pay off debt and finance the firm’s operational needs, acquisitions and new fund commitments.

Carlyle has not commented on the news.


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