Carlyle Bolsters Aerospace Portfolio

Buyer: The Carlyle Group

Target: Wesco Aircraft Hardware Corp.

Terms: Undisclosed

Legal Counsel: Seller: Gibson Dunn & Crutcher; Buyer: Latham and Watkins

Advisors: Seller: Duff & Phelps Securities; Buyer: Rothschild and Lehman Brothers

The Carlyle Group has won an auction to buy a majority position in Wesco Aircraft Hardware Corp., further strengthening its well known position in the aerospace and defense industries.

A Carlyle spokesman declined comment on the deal’s terms and debt levels. Equity came out of Carlyle Partners IV, its $7.85 billion U.S. buyout fund.

Wesco distributes aerospace hardware such as fasteners, rivets, nuts, bolts and bearings. It also distributes machine parts and tooling. The company serves as a partner to tier one aerospace and defense companies, providing hardware and services to reduce costs and improve efficiency in their customers’ basic production processes.

With headquarters in Valencia, Calif., the company has 5,000 customers including the U.S. Department of Defense. Wesco employs more than 600 people throughout North America, Eastern Europe and Israel. Management intends to stay on board following the deal.

Beginning to end, the process took close to six months, said a person familiar with the deal, and Carlyle was introduced to the opportunity through its preexisting relationship with Wesco CEO Randy Snyder. Carlyle will be looking to grow the company by expanding into related business lines and will consider further M&A, said the source.

Snyder, in the press release, alluded to Carlyle’s history in the aerospace industry. The firm’s current holdings in the sector include Aerostructures Corp., Aviall Services, Avio SpA, Landmark Aviation, NP Aerospace Ltd. and others.

Separately, Carlyle continues to amass more funding. The firm, last month, closed its second Japan-focused fund and its second Asia fund. Carlyle has chosen not to run the race for titanic funds and opted for closing a number of more specialized vehicles. Already this year, the firm has closed six funds totaling $9.1 billion, and now has roughly $42 billion under management. —M.C.