CG - The Carlyle Group L.P.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
24.00
+0.24 (+1.01%)
At close: 4:00PM EDT

24.00 0.00 (0.00%)
After hours: 4:00PM EDT

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Previous Close23.03
Open23.71
Bid23.99 x 800
Ask24.50 x 800
Day's Range23.28 - 24.03
52 Week Range15.09 - 25.20
Volume674,191
Avg. Volume785,784
Market Cap8.081B
Beta (3Y Monthly)1.59
PE Ratio (TTM)14.00
EPS (TTM)1.71
Earnings DateJul 31, 2019
Forward Dividend & Yield0.76 (3.20%)
Ex-Dividend Date2019-05-10
1y Target Est26.54
Trade prices are not sourced from all markets
  • When an iPhone 3-D Sensing Firm Asks for Blind Faith
    Bloomberg10 hours ago

    When an iPhone 3-D Sensing Firm Asks for Blind Faith

    (Bloomberg Opinion) -- Today should be a good news day for AMS AG, the Austrian maker of key components for the facial recognition system in Apple Inc.’s iPhone.It seems finally to be delivering on its repeated promise that a multi-year, $2 billion investment in 3-D sensing technology would ultimately pay off. It forecast third-quarter revenue of between $600 million and $640 million, well above analysts’ $526 million average estimate.Yet the good news came with a sting in the tail. Chief Executive Officer Alexander Everke said AMS was again evaluating the possibility of a bid for Osram Licht AG, after being approached by unidentified “potential financial partners.” The revelation comes just a week after AMS decided not to pursue an offer for the Munich-based lighting maker, which had already agreed a sale to private equity firms Bain Capital and Carlyle Group LP. That climbdown from AMS in turn came after re-entering talks it had previously abandoned, and… well you get the idea. It’s flip-flopping in the extreme.Maybe Everke has made the right calls technologically. AMS’s initial struggles stemmed from the disappointing sales of Apple’s iPhone X range of handsets. Now Android handset-makers are following up with more 3-D sensors, boosting orders for AMS’s gear. Operating cash flow and order backlogs are on the increase.But Everke does himself few favors. The former NXP Semiconductors NV executive has made AMS an extremely tough investment case: the stock has consistently had the highest 120-day volatility of any European tech firm over the past three years. The Osram affair is a prime example of the behavior causing this.As a conference call on Tuesday progressed, AMS shares pared earlier gains of as much as 10%. Analysts repeatedly tried and failed to get clarity from Everke and his team on the logic behind any Osram bid, and investor faith in his strategy appeared to wane by the minute. Executives repeatedly parroted a line about any bid target needing to meet AMS’s acquisition criteria, without giving any sense as to whether or how Osram met them. By the time the call ended, the stock was trading just 1.9% higher than Monday’s close.I wrote last week how any bid would require a serious leap of faith from investors. Perhaps he thought that the upswing in earnings would help warrant such trust. But given the failure to explain why any deal for Osram might make sense, the leap he’s asking for is a blind one. Investors have been burned enough before to be wary about taking it.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Jennifer Ryan at jryan13@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg10 hours ago

    AMS Rekindles Pursuit of Osram Alongside Strong Earnings

    (Bloomberg) -- AMS AG rekindled takeover interest in German lighting maker Osram Licht AG just a week after pulling an approach worth 3.7 billion euros ($4.1 billion).After speaking to financial backers, Austrian sensor maker AMS now thinks that it can "arrange prudent and committed financing for this potential transaction,” it said in its half-year earnings report Tuesday.Earlier this month AMS said it didn’t see "sufficient basis” for continuing discussions with Osram after doubts emerged about how AMS would fund a takeover of a company the same size as itself.AMS had proposed paying 38.50 euros a share, Osram revealed in a statement last week after its supervisory and managing boards had already accepted a lower bid worth 3.4 billion-euros from Bain Capital and Carlyle Group LP.A spokesman for Osram declined to comment Tuesday. In a call with analysts, AMS management declined to comment further on the potential for a deal, with executives saying they would disclose details on financing and partners only if they decide to make an offer."If it fulfills our criteria, we’re going to go ahead," AMS Chief Financial Officer Michael Wachsler-Markowitsch said in the call. "We will not comment further on Osram at this time."Read More: When an iPhone 3-D Sensing Firm Asks for Blind FaithAMS’s high leverage -- at six time debt to earnings -- would have meant raising 4.2 billion euros to complete the original deal, according to Bloomberg Intelligence European industry analyst Jawahar Hingorani. AMS has a market value of about $3.8 billion.In the case where a company already made one failed offer, a new one could only happen after a one-year cool-off period, a spokeswoman for the German Federal Financial Supervisory Authority said in an emailed statement. The target of that offer, in this case Osram, could choose to waive that period.AMS also posted stronger than expected earnings Tuesday, and expects third quarter revenue to come in between $600 million and $640 million, above the $525.5 million consensus estimate, according to data compiled by Bloomberg.AMS shares rose as much as 10.2% Tuesday in early trading, the most since July 1. Osram shares were up 3.25%.The positive news for AMS comes after a warning earlier this year that it would suspend its cash-dividend policy and scrap numerical year-ahead guidance after its first-quarter revenue forecast missed analysts’ estimates.Both AMS and Osram are suppliers of components to Apple Inc., with AMS supplying sensors used for facial recognition in iPhones, while Osram supplies sensors for the Apple Watch’s heart-rate sensor. Unlike AMS, Osram receives about half its business as a supplier to the automotive industry, and a prolonged weakness in that sector has hurt the company over the past year.Negotiations to buy Osram have moved slowly since they were first revealed in February. Osram has issued a string of profit warnings, and bidders also had concerns about the impact of the U.S.-China trade war on business. AMS was among a clutch of European semiconductor makers that said they would still keep on supplying to Huawei Technologies Co., after the effects of the U.S. ban continued to ripple across global markets.(Updates with share price, comment from analyst call and Bafin statement.)To contact the reporters on this story: Andrew Noël in London at anoel@bloomberg.net;Oliver Sachgau in Munich at osachgau@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Giles Turner at gturner35@bloomberg.net, Tara PatelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • CSX Leads Industrial Earnings Off the Rails
    Bloomberg4 days ago

    CSX Leads Industrial Earnings Off the Rails

    (Bloomberg Opinion) -- To get Brooke Sutherland’s newsletter delivered directly to your inbox, sign up here.It’s going to be unbearably hot across much of the U.S. this weekend, but the early returns on industrial earnings have been decidedly cool. A nearly 30% run in CSX Corp. shares heading into its second-quarter earnings report suggested this was a company where investors thought they could find shelter amid a growing body of worrisome manufacturing data. They were wrong. The shares slumped more than 10% the day after CSX reversed a forecast for low single-digit growth in revenue this year and predicted instead that revenue would dip as much as 2%. The East Coast railroad says it’s being cautious, but the time for conservatism is when you start the guidance-giving process, so that strikes me as an inadequate explanation for such a deep cut. CEO James Foote said the macroeconomic backdrop was one of the most “puzzling” he’s ever experienced and that there are no concrete signs of improvement in weak coal, intermodal and industrial volumes.Elsewhere in transportation, J.B. Hunt Transport Services Inc. and West Coast railroad Union Pacific Corp. actually saw their shares pop on earnings, but that seems to be a case of more realistic expectations than a drastically more positive view of the macroeconomic environment. J.B. Hunt was essentially flat going into earnings, for example, and Union Pacific had sold off in sympathy with CSX before it reported. Union Pacific said it expects second-half volume to be down about 2%, which implies a decline for the full year compared with an earlier call for a low-single digit gain – basically mimicking CSX’s move. The other challenge with CSX is that it appears to be far enough along in its conversion to precision-scheduled railroading that there isn’t as much fat left to cut as there is at Union Pacific. But it’s track record of improved performance is still relatively short, capping its ability to make market share gains amid a surplus of capacity and lower spot rates in the trucking market. Bloomberg News’s Cameron Crise points out the sharp divergence in the performance of S&P 500 railroads and FedEx Corp. over the past, calling it a proxy of sorts for the trade war-inspired slowdown that’s hit companies with international exposure like FedEx harder than those focused on the domestic market. If U.S. railroad stocks fail to recover from the CSX-inspired selloff and the gap to FedEx narrows, that could be a sign that the domestic economy and the bull market are running out of steam, he writes. FedEx, of course, has plenty of idiosyncratic issues holding back its stock. The company’s annual report filed this week included interesting disclosures abut the risk of an activist shareholder getting involved and some additional detail on the logistics investments that could render Amazon.com Inc. a competitor. Things were a bit better at the multi-industrial companies, but there was still cause for concern. Textron Inc. said its aviation backlog slipped by $100 million in the second quarter as macroeconomic concerns and President Donald Trump’s threat to impose wide-ranging tariffs on Mexico spooked business-jet customers. That’s counteracted by Honeywell International Inc.’s report of double-digit sales growth for new business jet equipment, but still a troubling sign of just how nervous people are about making big investments. You can usually count on Honeywell to churn out an earnings beat, and the company didn’t disappoint, raising its profit guidance for the full year. But the outlook wasn’t as robust as some analysts were expecting. Organic sales growth of 5% could end up being the pace to beat this quarter, but that was weaker than anticipated and a forecast for 2% to 4% growth in the third quarter would suggest an accelerating slowdown. The dynamic of somewhat disappointing sales numbers but steady earnings growth in some ways reinforces Honeywell’s argument that last year’s breakups and a pristine balance sheet will make it more resilient in a downturn, but I remain unconvinced that margins for anything except funeral homes are recession-proof. It helped Honeywell that the sales weakness was mostly confined to its safety and productivity solutions unit, the smallest of its four main businesses, and aerospace remained impressively robust with 11% organic sales growth. The industrial companies on tap to report earnings next week may not be so lucky, particularly 3M Co., which seems destined for yet another guidance cut to reflect the deepening slowdown.ALL BOEING WANTS FOR CHRISTMAS IS A FLYABLE MAXBoeing Co. this week pre-announced a $4.9 billion after-tax second-quarter charge to reflect its estimate of compensation owed to airlines grappling with a grounding of the beleaguered 737 Max that’s now entering its fifth month. American Airlines Group Inc., Southwest Airlines Co. and United Airlines Holdings Inc. this week pulled the Max from their schedules through the beginning of November – a timeline that jibes with Boeing’s call for the plane to return to service during the fourth quarter. But the risk remains that the grounding stretches into 2020. The Federal Aviation Administration, mindful of restoring its reputation as the global standard-bearer of safety protocol, is keen to coordinate a return to service with European and Asian regulators. And while a fix for the flight-software system linked to the Max’s two fatal crashes has essentially been completed, there remain hurdles to remedying a separate issue with a microprocessor that was identified in June, including convincing the FAA that a software update is sufficient, according to the Wall Street Journal. Even if Boeing can get the plane recertified and flying again by the fourth quarter, it matters a great deal which particular month that happens. Airlines estimate it will take a month to 45 days to complete the maintenance necessary to bring the Max jets they already operate out of storage, which is to say nothing of the additional planes they had been expecting to support busy schedules. I would imagine airlines’ demands for compensation would rise materially if they are forced to scramble and reassess capacity for holiday flights. Ryanair Holdings Plc said this week it’s prudently planning for a December return of the Max, but pared its growth plans for the 2020 summer travel season. It can only accept six to eight new Max planes per month, which will leave the budget airline with about half of the fleet it had been planning on for that peak season. Data points like that make me highly skeptical of Boeing’s aspirations to ramp up to a 57-per-month production pace for the 737 program in 2020.A WORD ON WAREHOUSESThere has been a surge of spending over the past few years on industrial warehouse assets. The latest deal came this week , when Prologis Inc. agreed to buy Industrial Property Trust and its 236 properties in areas such as the San Francisco Bay Area, Chicago and New Jersey for about $4 billion. This follows Prologis’s acquisition of DCT Industrial Trust Inc. last year for more than $8 billion and its pursuit earlier this year of GLP Pte’s U.S. warehouse assets, which ultimately went to Blackstone Group LP instead for $18.7 billion. Meanwhile, Tom Barrack’s Colony Capital Inc. is exploring a sale of its unit that owns warehouses as part of a strategic review meant to resuscitate its plunging market value, according to Bloomberg News. I understand the logic of these deals: Retailers are under immense pressure to build out their e-commerce capabilities and shorten their delivery times and on the face of it, that trend looks less vulnerable to the trade war and macroeconomic uncertainties than many others. Even so, it gives me pause to hear Honeywell say customers for its Intelligrated warehouse-automation business are pushing major system rollouts into the second half of the year. Intelligrated is still growing rapidly, with organic sales growth of more than 20% for the first half of 2019, and Honeywell CEO Darius Adamczyk said he knew for a fact that the delayed orders hadn’t gone away. But going back to my earlier comment about funeral homes, I’m getting less confident that even this trend can withstand the test of a true downturn. I asked Bloomberg Opinion's retail expert Sarah Halzack what she thought. She pointed out that companies like Walmart Inc. and Williams-Sonoma Inc. are too far along in converting their businesses to e-commerce to back out, whereas those who are already struggling such as J.C. Penney Co. will find it harder to justify making those kinds of investments.DEALS, ACTIVISTS AND CORPORATE GOVERNANCEJohn Flannery has resurfaced. The former CEO of General Electric Co. will now be an advisory director to Charlesbank Capital Partners, a middle-market private equity firm managing more than $5 billion of capital. I’ve always felt a bit bad for Flannery, who spent 30 years working his way up the ladder at GE and finally ascended to the CEO post, only to find out that his actual job was going to be more akin to a garbage man. Sure, he made his share of mistakes as CEO. But the reality is he was probably never going to last in that job no matter what he did. GE needed one CEO to publicize and unearth the skeletons in its closet ($22 billion goodwill writedown on the disastrous Alstom SA deal, $15 billion reserve shortfall in the long-term care insurance business) and another CEO to try to fix the mess. That’s now Larry Culp. Still, it has to sting a bit that Steve Bolze, Flannery’s competitor in the race to succeed Jeff Immelt, is a senior managing director at Blackstone, a slightly more prominent firm than Charlesbank. Bolze is blamed by many investors for mismanaging GE’s power unit and exacerbating the financial pain from a slump in gas turbine demand.Crane Co.’s bid for Circor International Inc. got a last minute surge of support. Mario Gabelli’s Gamco Investors Inc. agreed to tender shares to Crane after the buyer raised its price to $48 a share earlier this month. Roughly 45% of outstanding Circor shares have been elected to be tendered, people familiar with the matter told Bloomberg News. That’s not enough to force a merger (although there are still a few more hours before the tender offer expires at midnight), but it should be enough to get the attention of Circor’s board’s. In the wake of the Crane offer, Circor laid out a bold (and by nature, rather fluffy) plan to boost margins and lower debt. Shareholders are now signaling quite loudly that they don’t have much faith in the company’s ability to follow through. It’s pretty remarkable to see this level of pushback outside of an annual meeting, though. I had worried Crane’s bid might have been the victim of bad timing, with its offer becoming public a few weeks after Circor’s 2019 meeting. The fact that Circor’s board had privately received the Crane offer prior to the meeting and didn’t feel a need to tell investors about it has been one of Gabelli’s chief criticisms. This level of support from Circor shareholders may save Crane from having to wait a year to relaunch its bid with a proxy fight.Osram Licht AG, the lighting maker that’s agreed to sell itself to Bain Capital and Carlyle Group LP, disclosed this week that Austrian industrial manufacturer AMS AG had made a fresh offer for the company at a higher price. Bain and Carlyle are offering 35 euros per share, or 3.4 billion euros ($3.8 billion), while AMS had proposed to pay 38.50 euros per share, or about 3.7 billion euros. The problem is, AMS itself is valued at less than what it offered for Osram; it’s had negative free cash flow for at least the past two years; and it’s already carrying about 1.2 billion euros of net debt. Osram agreed to let AMS perform due diligence, but said the probability of a deal materializing was “rather low.” Literally the same day that its latest offer was disclosed, AMS said it was walking away. In some ways that’s actually kind of surprising – why wouldn’t you take the opportunity to do due diligence? But anyway, this amusing M&A adventure has now come to an end.Callon Petroleum Co. agreed to buy Carrizo Oil & Gas Inc. in an all-stock transaction valued at $3.2 billion including debt. Bernstein analyst Bob Brackett called it a “pretty lame deal all-in-all”, while my Bloomberg Opinion colleague Liam Denning said the merger sounds a “distinct sad-trombone note.” Carrizo helps Callon double down on the Delaware Basin with contiguous acreage and lets it add free cash flow on the cheap, but it also dilutes its status as a pure-play operator by adding acreage the Eagle Ford region, where it may be harder to find cost savings. Some investors may have viewed Callon as a target and are disappointed to see it on the other end of a deal. The consolidation of shale players is healthy and necessary, Liam writes. But the fact that Carrizo has chosen to sell at a modest premium when its stock was trading at the lowest levels in a decade is pretty telling, too.CRH Plc agreed to sell its European plumbing and heating-distribution business to Blackstone for 1.64 billion euros ($1.9 billion). CEO Albert Manifold has been trying to steer the company toward higher growth markets including cement and raise money for acquisitions. This deal helps it do both. Davy analyst Robert Gardiner says the purchase price is attractive at about 16 times earnings before interest and taxes.BONUS READING Saturday Will Be Hot. Oil and Gas Will Be Not: Liam Denning Axalta Is Said to Draw Interest From Kansai Paint and PPG Ex-Cons Find Second Chances Easier to Get in Tight Labor MarketThe Moon Is the Next Frontier in Rivalry Between China and U.S. Porch Pirates Spot Criminal Opening in Amazon Prime Day BonanzaTo contact the author of this story: Brooke Sutherland at bsutherland7@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Barrons.com5 days ago

    Elizabeth Warren Targets ‘Vampires’ in Attack on Private-Equity Industry

    The senator’s plan comes less than two weeks before the next round of Democratic presidential debates.

  • Elizabeth Warren targets ‘vampires’ in attack on private-equity industry
    MarketWatch5 days ago

    Elizabeth Warren targets ‘vampires’ in attack on private-equity industry

    Sen. Elizabeth Warren on Thursday unveiled a proposal for new rules on private-equity firms, likening companies to vampires as she took her latest get-tough approach to the financial industry.

  • GlobeNewswire5 days ago

    The Carlyle Group to Announce Second Quarter 2019 Financial Results and Host Investor Conference Call

    WASHINGTON, July 18, 2019 -- Global investment firm The Carlyle Group L.P. (NASDAQ: CG) will host a conference call at 8:30 a.m. EDT on Wednesday, July 31, 2019 to announce its.

  • United contract change leads to layoff of more than 400 workers at DIA
    American City Business Journals7 days ago

    United contract change leads to layoff of more than 400 workers at DIA

    PrimeFlight Aviation Services is laying off 439 workers who work under a contract the company previously had with United Airlines at Denver International Airport. … PrimeFlight anticipates that many of these employees will be hired by the replacement vendor,” the WARN Notice said.  Employees were notified of the layoffs beginning on Monday.

  • A $4.2 Billion Bid to Crash a Private Equity Party Fails
    Bloomberg7 days ago

    A $4.2 Billion Bid to Crash a Private Equity Party Fails

    (Bloomberg Opinion) -- Just what is AMS AG up to?On Monday, the supplier to Apple Inc. made a short-lived, 3.7 billion-euro ($4.2 billion) effort to snatch Osram Licht AG from private equity firms Bain Capital and Carlyle Group LP, which had sewn up a lower-priced takeover of the German lighting-maker earlier this month.The abortive effort will underscore investor concerns about the company’s strategy under Chief Executive Officer Alexander Everke. The former NXP Semiconductors NV executive has spent billions of dollars trying to position AMS to capitalize on demand for new sensing technology used in the iPhone’s Face ID recognition system. But after his three years at the helm, the stock is trailing peers Finisar Corp. and Lumentum Holdings Inc.The flirtation with Osram was short and not particularly sweet. At 5:52 p.m. in London, Bloomberg News reported that AMS had made an offer for the Munich-based firm, some 11 days after Osram’s board accepted the private equity firms’ 3.4 billion-euro bid. Within 15 minutes, the target released a statement confirming it had received a non-binding offer from AMS. The company dismissed “the probability of this transaction materializing as rather low.” By midnight, AMS declared it was ending the takeover talks.Maybe the approach was an attempt to get a closer look at Osram’s books, or its 3-D sensing technology. If it was, then full credit to the lighting giant for calling Everke’s bluff, since financing for AMS’s bid wasn’t yet fully in place. While Osram said it would let the bidder perform due diligence, it was quick to emphasize that it could only do so under strict conditions.If it was a serious bid, then AMS shareholders have every right to feel bewildered. The target largely operates in the slowing automotive market, so would have hardly offset stagnating smartphone sales. Concern that the company may be more open to outsized and strategically questionable dealmaking than investors assumed helped to push the stock down by as much as 4.6% on Tuesday morning.Everke would have been asking for a lot of faith from investors to finance the deal. The company was planning to sell new stock – but would still have been left with net debt equivalent to about 27 times this year’s predicted free cash flow. This would have tried investor patience, which has already been sorely tested. AMS has spent $2 billion over three years buying companies and expanding production capacity to secure a dominant position supplying components for 3-D scanners in the latest generation of iPhones, only for sales of the handsets to promptly slow. AMS shares are 66% below their 2018 peak.In 2017, Everke predicted 2019 sales would exceed $2.7 billion, with an Ebit margin of at least 30%. After scrapping its dividend and year-ahead guidance figures in May, analysts now expect the company to report a 10% Ebit margin on sales of just $1.9 billion. Communication from management has been particularly poor, according to Hauck & Aufhaeuser Privatbank analyst Robin Brass.Everke’s short-lived move on Osram looks like a shot in the dark. If his big bet on smartphones isn’t paying off, he needs to shed some light on what his new strategy is.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • With a $1B valuation, DiscoverOrg is charging hard toward a possible IPO
    American City Business Journals11 days ago

    With a $1B valuation, DiscoverOrg is charging hard toward a possible IPO

    Co-founder and CEO Henry Schuck has cultivated a metrics-driven culture that has sparked impressive growth

  • Financial Times12 days ago

    Carlyle raises $3bn for new private credit fund

    Private equity firm Carlyle has raised about $3bn for a new fund that will lend directly to companies, as investors from pension plans to insurance companies chase returns in a world of near record-low interest rates. Carlyle’s new credit fund, which exceeded an original target of $2bn, has already handed out $850m in loans to 10 companies in North America and Europe. “We’ve made tremendous progress over the past three years expanding the global credit platform and this marks another important step forward in that effort,” Mark Jenkins, managing director at Carlyle, said of the fundraising.

  • Barrons.com14 days ago

    Carlyle Group May Be the Last Private-Equity Firm to Convert. That’s Good News for Its Stock.

    Private-equity firms have been switching their ownership structures to C-Corporation, and Carlyle Group may be the latest to make the jump. Carlyle stock rose on the news.

  • Carlyle Plans to Announce Conversion to C-Corp With Earnings
    Bloomberg14 days ago

    Carlyle Plans to Announce Conversion to C-Corp With Earnings

    (Bloomberg) -- Carlyle Group LP is planning to announce that the private equity firm will convert to a corporation when it reports second-quarter earnings, according to people with knowledge of the matter.The shares rose 4.1%, the biggest one-day jump since April.The Washington-based firm would be the last of the private-equity giants to switch from a partnership to a corporation, known as a C-corp -- a move designed to bring more investors into the stock. KKR & Co., Blackstone Group Inc., Apollo Global Management LLC and Ares Management Corp. all have seen their share prices jump since they made the change, which enables them to be included in indexes, mutual funds and exchange-traded funds.Carlyle, which hasn’t announced its earnings release date, has been exploring the move for several months. A representative for the firm declined to comment.“The pain of converting from a tax point-of-view is negligible and the benefits are substantial,” said Robert Willens, an independent tax consultant. “We’ve seen the stocks of these companies increase since their conversions, proving the theory that motivated them was a valid one.”Carlyle has mostly lagged behind its rivals since KKR announced in May 2018 that it would convert. Carlyle’s shares are up about 18% since then, less than KKR and Apollo. Blackstone has been the best performer, jumping about 50%.“The benefits we’ve seen from the conversions have not gone unnoticed,” Carlyle co-Chief Executive Officer Kewsong Lee said in a May conference call with investors. “There are many complex operational moving parts in connection with a conversion, and we intend to conclude our thinking with a decision in the not too distant future.”Private equity executives, who have a lot of their personal wealth in company stock, have long complained that their businesses are being undervalued by public investors. The catalyst for the switch was the new tax law in December 2017, which slashed the corporate rate to 21% from 35%.(Updates share gain in second paragraph.)\--With assistance from Melissa Karsh.To contact the reporter on this story: Heather Perlberg in Washington at hperlberg@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Vincent Bielski, Josh FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Osram Accepts $3.8 Billion Offer From Bain and Carlyle
    Bloomberg18 days ago

    Osram Accepts $3.8 Billion Offer From Bain and Carlyle

    (Bloomberg) -- Osram Licht AG’s supervisory and managing boards accepted a 3.4 billion euro ($3.8 billion) takeover bid from Bain Capital and Carlyle Group LP, ending the German lighting company’s relatively brief and at times contentious period as a standalone company.Bain and Carlyle are offering 35 euros a share, 21% more than the stock’s close on Tuesday, amid reports about the latest offer. The price is still 15% lower than its peak this year in February. They’ve put a minimum acceptance level of 70% on the deal, excluding shares owned by Osram, and the acceptance period will run until early September. The stock rose 1.4% to 32.94 euros at the open of trading in Frankfurt.“Bain and Carlyle bring a lot of experience and have a deep knowledge of the industry,” Ingo Bank, Osram’s chief financial officer, said in a Bloomberg TV interview on Friday. “They will help us build the portfolio.”Bloomberg reported earlier Thursday that Osram’s supervisory board was poised to accept the offer.After Siemens AG spun off the light bulb-making division in 2013, Osram Chief Executive Officer Olaf Berlien began to refocus on higher technology, sparking a bitter and public dispute over strategy. Bain and Carlyle’s purchase of Osram would add to the $51.6 billion in private equity buyouts of European companies announced this year, according to data compiled by Bloomberg.Negotiations to buy Osram have moved slowly since they were first revealed in February. Funding has been a challenge as potential lenders raised concerns about future earnings forecasts for the company after Osram issued a string of profit warnings.Osram’s earnings deterioration during negotiations had a big impact on the deal, and the bidders also had concerns about the impact of the U.S.-China trade war on business. Bain and Carlyle were able to push down the offer price, but also struggled to raise a significant amount of debt, people familiar with the matter said. In the end about 70% of the acquisition cost -- an unusually high proportion -- comes from equity, or cash contributed by the buyers, while the remainder will be borrowed money, the people said.The offer is unlikely to include a so-called material adverse change clause, one of the people said, a provision that would allow the buyer to withdraw from the transaction if certain negative events like a fresh profit warning arise. The buyout firms declined to comment.Osram suffered from a downturn in the automotive industry, yet there remain growth opportunities in that sector, including with autonomous vehicles and continued digital lighting, Bank said in the interview. Bain and Carlyle will be focused on margin improvement as well as growing the business, he added.What Bloomberg Opinion Says“It would require real guts to turn down what Bain and Carlyle are dangling. Osram was already in a weak state when news about the potential bid first emerged in November.”--Bloomberg Opinion columnist Chris HughesThe German company has struggled since it was spun off from Siemens. Berlien shifted Osram’s focus to high-tech specialized lighting and LED chips, although he’s failed to get a handle on weakening market demand as European car sales drop. He has also tried to branch out into new areas to attract revenue such as through the purchase of horticultural lighting maker Fluence.Bain and Carlyle support the company’s strategy, and the bid is “attractive to employees as a lot of the labor provisions will stay intact so, yes, we support the offer,” Bank said.Osram now has the task of getting shareholders on board. Given the board’s acceptance of the offer came just last night, Bank said the company “doesn’t have much feedback” from shareholders yet, but expects the bid to receive “very good support” from investors.The company is hoping to avoid the fate of other take-privates in Germany such as online classifieds operator Scout24 AG, where Blackstone Group LP and Hellman & Friedman in May failed to convince sufficient shareholders to sell amid pressure from hedge funds to boost the offer price.AMS InterestDuring negotiations with Bain and Carlyle, Austrian sensor manufacturer AMS AG made an informal approach about a potential takeover of Osram, according to people familiar with the matter. While there was some strategic fit to a deal, Osram decided against pursuing talks because of concerns about the feasibility of AMS to fund the transaction due to its size and debt levels, said the people.A representative for AMS, which has a market value of $3.4 billion and counts Apple Inc. among its key clients, declined to comment.Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Macquarie Group Ltd. as well as Nomura Holdings Inc. were financial advisers to Bain and Carlyle. Perella Weinberg Partners LP worked with Osram.(Adds info on offer, AMS interest and advisers from seventh paragraph.)\--With assistance from Andrew Noël.To contact the reporters on this story: Eyk Henning in Frankfurt at ehenning1@bloomberg.net;Aaron Kirchfeld in London at akirchfeld@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.netTo contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg19 days ago

    We’re From Private Equity and We Aim to Underwhelm You

    (Bloomberg Opinion) -- Europe’s latest bid by a leveraged-buyout firm puts investors in a tricky spot. The 3.4 billion-euro ($3.8 billion) offer for German lighting group Osram Licht AG values the company’s shares at less than what they were trading at as recently as March. Nevertheless, it would require real guts to turn down what Bain Capital and Carlyle Group LP are dangling.Osram was already in a weak state when news about the potential bid emerged in November, pushing the stock as high as 41 euros. A profit warning in March – the company’s sixth in little more than a year – dragged the shares down to 25 euros, and they would doubtless have sunk even lower had the takeover talks not been rumbling on. The 35 euros-a-share offer is some 39% above that low point, and 22% above the average price over the past three months.At 3.8 billion euros including net debt, the mooted valuation is a generous nine times estimated Ebitda for 2020. Signify NV, a Dutch rival that was formerly part of Royal Philips NV, trades at just six times that metric.These dynamics should focus the minds of Osram’s supervisory and management boards as they weigh the offer. The share price would suffer badly if this deal failed. Moreover, the company would need a very convincing strategic plan to justify turning it down. Its current team will struggle to make the case for staying independent after presiding over the sharp decline in the stock since the start of 2018.Osram has some funky technology and the rise of autonomous vehicles could be its savior. But, for now, it has become uncompetitive in markets that have themselves deteriorated. Ebitda this year is forecast to fall by 50%. Turning the company around will require greater focus, necessitating asset sales and job cuts to reduce costs. The financial performance has to get worse before it gets better – whoever is in charge.In turn, that need for restructuring makes this a particularly risky buyout. A declining business in a cyclical industry is difficult to load up with debt. Financing for the transaction is thus likely to be mainly equity-based – hence the need for two buyout firms on what is otherwise a relatively small deal.To make a mid-teens internal rate of return over five years requires doubling the equity value of an investment. With little benefit from leverage, that would mean having to grow the enterprise value by almost the same proportion.It’s hard to see what the business will look like in 2025. Bain will probably make its return by breaking up the company and selling it in chunks at varying profit multiples rather than offloading it in one jumbo exit.The math might just work. Analysts reckon Osram in its current form could make about 760 million euros of Ebitda in 2023. If Bain can do a bit better than that and sell at a blended multiple similar to the one at which it is buying, it should be able to double its money and earn its return.Could Osram do the same thing as a public company? Quite possibly. But maybe not with the current management – or shareholders.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Osram Gets $3.8 Billion Buyout Offer From Bain, Carlyle
    Bloomberg19 days ago

    Osram Gets $3.8 Billion Buyout Offer From Bain, Carlyle

    (Bloomberg) -- Bain Capital and Carlyle Group LP have made a 3.4 billion euro ($3.8 billion) bid to acquire German lighting firm Osram Licht AG, concluding months of negotiations for the long-sought deal.Osram stock rose as much as 5.1% to 33.90 euros on Thursday after the former Siemens AG spinoff confirmed it has received a binding offer of 35 euros a share and will decide “shortly” whether to accept it. The company’s supervisory board is scheduled to meet later to vote on the agreement, according to a person with knowledge of the matter.Representatives from Carlyle and Bain declined to comment.A deal would mark the end of Munich-based Osram’s relatively brief and at times contentious period as a standalone company. Siemens spun off what was a light bulb-making division in 2013 after which Osram Chief Executive Officer Olaf Berlien began to refocus on higher technology, sparking a bitter and public dispute over strategy. Bain and Carlyle’s purchase of Osram would also add to the $51.6 billion in private equity buyouts of European companies announced this year, according to data compiled by Bloomberg.What Bloomberg Intelligence Says“A 35 euro-a-share bid implies an enterprise value of 3.9 billion euros and a 12-month forward EV/Ebitda multiple of 7.7x, based on our scenario analysis. This is slightly above the 7.5x average for the BI global lighting peer group and seems fair, given Osram’s dim profit outlook and high exposure to the beleaguered automotive end-market.”\-- Jawahar Hingorani, European industrials analystClick here to read the researchNegotiations to buy Osram have moved slowly since they were first revealed in February. Funding has been a challenge as potential lenders raised concerns about future earnings forecasts for the company after Osram issued a string of profit warnings.That led the banks to reconsider the terms they were willing to offer on an acquisition loan, said people familiar with the matter, who asked not to be identified discussing the details.Osram in March announced its sixth profit warning in just over a year as orders slowed for its lights and components, which are used in cars and smartphones. The company said in May the general economic slowdown is hurting its business.Read more: Osram Stands by Outlook as Takeover Talks ContinueThe German company has struggled since it was spun off from Siemens. Berlien shifted Osram’s focus to high-tech specialized lighting and LED chips, although he’s failed to get a handle on weakening market demand as European car sales drop. He has also tried to branch out into new areas to attract revenue such as through the purchase of horticultural lighting maker Fluence.(Adds shares in second paragraph.)To contact the reporters on this story: Sarah Syed in Berlin at ssyed35@bloomberg.net;Eyk Henning in Frankfurt at ehenning1@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Ben Scent at bscent@bloomberg.net, Tara PatelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Gabrielle Rubenstein’s new private equity firm focuses on healthy foods
    Yahoo Finance21 days ago

    Gabrielle Rubenstein’s new private equity firm focuses on healthy foods

    Billionaire investor David Rubenstein's daughter founded a private equity firm focused on healthy food investments.

  • ‘That wasn’t her decision’: Why Taylor Swift’s record label beef misses the point
    Yahoo Finance22 days ago

    ‘That wasn’t her decision’: Why Taylor Swift’s record label beef misses the point

    Taylor Swift's catalog is part of a $300 million acquisition of Big Machine Label group by mega-manager Scooter Braun. The singer-songwriter calls the deal part of her "worst nightmare."

  • Moody's25 days ago

    PES Holdings, LLC -- Moody's downgrades PES to Ca following announcement to cease operations

    Moody's Investors Service ("Moody's") downgraded PES Holdings, LLC (PES) Corporate Family Rating (CFR) to Ca from B2, Probability of Default Rating (PDR) to Ca-PD from B2-PD, its Tranche A first lien term loan facility to Caa1 from Ba2, and its Tranche B and Tranche C of its first lien term loan facility to Ca from B2. "The downgrade and the negative outlook reflect the ongoing uncertainty behind the company's future prospects and our expectation of weak collateral coverage for PES's debt after the massive fire incident on June 21," said Arvinder Saluja, Moody's Vice President.

  • The New Terminal One Team Helps Launch Queens High School Students Into Aviation Careers As The JFK Redevelopment Program Community Initiative Gains Altitude
    PR Newswire26 days ago

    The New Terminal One Team Helps Launch Queens High School Students Into Aviation Careers As The JFK Redevelopment Program Community Initiative Gains Altitude

    JAMAICA, N.Y., June 27, 2019 /PRNewswire/ -- The New Terminal One Team took to the skies today announcing an innovative community initiative to provide flight-training scholarships to rising students in the August Martin High School Aviation Academy as the air travel industry predicts a global shortage of pilots in the future, officials said.

  • Bloomberg26 days ago

    A Next-Generation Rubenstein Seeks Investments in Healthy Food

    (Bloomberg) -- Gabrielle “Ellie” Rubenstein is getting into the family business. The 31-year-old daughter of Carlyle Group co-founder David Rubenstein formed Manna Tree Partners last year to invest in companies focused on healthy food.As a downhill racer and food allergy sufferer, Ellie Rubenstein has long been interested in nutrition. The 2010 Harvard University graduate, who went on to study agriculture economics and agribusiness management in a joint program at Purdue and Indiana, saw the opportunity to create Manna Tree while making food investments at Declaration Capital, which manages her family’s fortune.Co-founded with Ross Iverson and Brent Drever in May 2018, the firm’s first bet was Vital Farms, among the largest brands of pasture-raised eggs and butter in the U.S.“Ellie and her partners have an immense amount of drive and have found an attractive niche, which is clearly resonating with the marketplace,” said David Rubenstein, who is also the host of a Bloomberg Television series in which he interviews fellow business luminaries.Private equity firms like Carlyle have ballooned in size since their inception in the 1980s, when they gained fame for leveraged buyouts of firms like RJR Nabisco Inc. Today, they’re among the world’s biggest lenders and owners of real estate and the founders of the largest groups have all become billionaires with their own family offices.For now, Manna Tree is relatively small, operating with a team of nine, including six women.Ellie Rubenstein says the next generation of asset managers will focus on helping companies grow without taking complete control.“Managers want to be involved, but need help getting to the next level,” she said. “We want to make sound decisions with what we see in our own generation.”Manna Tree will face considerable challenges. Among them: Having to chase deals at a time when competition is more fierce than ever. A record 3,749 private equity funds were in the market at the start of this year, according to Preqin.While investors still have an appetite for smaller firms, they’re giving more money to giants, with the 10 largest funds in 2018 accounting for almost a quarter of capital raised, Preqin data show.‘Big Difference’Vital Farms considered about 40 different players in the private equity arena before settling on Manna Tree. Having a link to the Carlyle co-founder made it easier to go with a new firm, said Matt O’Hayer, executive chairman of Vital Farms.“Carlyle by itself is not the kind of firm we would look to,” said O’Hayer, who started Vital Farms in 2007. “Mission is really important to us. Ellie was really focused on good-for-you foods and sustainable agriculture, all the things we are about, and that made a big difference.”From the perspective of a potential portfolio company, taking on a private equity firm as minority partner is more palatable than losing control, said Drever, co-founder and chief operating officer of Manna Tree.“It opens more doors for us,” said Drever, who has experience coaching and training companies. “We’re not a threat to them.”Manna Tree had raised about $23 million as of the end of March, a regulatory filing shows. The Vail, Colorado-based firm declined to comment on how much money it’s raised. David Rubenstein has a 10% stake in the general partnership.Learning From DadEllie Rubenstein and her team are seeking businesses with $10 million to $50 million of revenue -- and with a chance to grow to as much as $250 million in five to seven years. To find the next opportunities, Ellie Rubenstein has borrowed a page from her father’s playbook. Since she started her own business, she’s spent about 300 days on the road.Ellie Rubenstein said she’s been learning from her father for most of her life. She remembers accompanying him on a trip to Japan when she was in third grade, watching him make global connections as she toured a fish market. These days, he’s quick to swap his suit and tie for farm clothes, joining Ellie to meet with prospective companies.“It’s exciting for me to have my dad in an environment that’s not expected,” Ellie Rubenstein said. “He gives us advice to help us achieve milestones.”To contact the reporter on this story: Heather Perlberg in Washington at hperlberg@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Alan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • A Beaverton digital company adds to its quickly expanding base
    American City Business Journals28 days ago

    A Beaverton digital company adds to its quickly expanding base

    In its second acquisition since May, digital services company ProKarma has acquired a Memphis, Tenn.-based marketing software specialist. The agreement to purchase Vanick Group is part of the Beaverton-based firm’s larger strategy to transform its original custom software business to a company that provides services to clients undergoing their own digital transformation. ProKarma’s customers had asked for more help with APIs.

  • Bill Gates talks global challenges, biggest regret to D.C.-area business leaders
    American City Business Journals28 days ago

    Bill Gates talks global challenges, biggest regret to D.C.-area business leaders

    The famed Microsoft founder talked about the one thing he thinks had set the tech giant back in recent years.