Target: Firth Rixson
Sponsor: Lehman Brothers Co-Investment Partners
Seller: The Carlyle Group
Stake purchased: 36%
Advisors: Seller: Lehman Brothers, Morgan Stanley
Initial reports said that Carlyle was looking for a complete exit from the company and that the deal could be worth up to $1.14 billion (£600 million). Assuming Firth Rixson maintained its $1.14 billion valuation, the 36% stake purchased by Lehman would be worth around $400 million.
The Carlyle Group purchased U.K.-based Firth Rixson in 2003 for approximately $167 million in a public-to-private transaction. Carlyle made the investment through its Carlyle Partners III and Carlyle Europe Partners funds and merged Firth Rixson with Forged Metals, a Fontana, Calif.-based aerospace ring provider Carlyle had already owned.
Lehman Brothers Co-Investment Partners, a subsidiary of New York-based banking giant Lehman Brothers, is in the process of raising its inaugural fund with a target of $1 billion, according to documents filed with the Securities and Exchange Commission. As of this past June, the fund has closed on almost $121 million from 29 investors, according to SEC documents. The Los Angeles Fire and Police Pension System has committed $10 million to the fund.
The Lehman co-investment group has already begun deploying capital, and along with John Hancock Financial Services, invested in
While Carlyle did not get the full realization it had been seeking, the Lehman deal provides Carlyle with what it termed in a statement, a “significant return.”
Caryle has engineered a flurry of liquidity events in recent months. Last month alone it announced three realizations, selling its stake in Italy’s Avio for $3.3 billion (€2.57 billion) to
Firth Rixson is based in Sheffield, U.K. and Hartford, Conn. It makes engineered forged, cast and other special metal products for the aerospace industry and a variety of industrial markets such as the heavy truck, off-highway, medical, mining and other industries. Firth Rixson owns 15 facilities spread across Asia, Europe and North America and has hinted that it could build out its Asian presence in the future.
Since being acquired by The Carlyle Group and merged with Forged Metals, Firth Rixson has grown by acquisition. It purchased U.K.-based metal ring provider Turbine Rings Technologies Limited (TRT) in late 2003 and Calif.-based aerospace application specialist Schlosser Forge almost a year later in October of 2004. —M.S.