Doughty Hanson has agreed to sell Dunlop Standard Aerospace, the defence and aerospace parts and services provider, for $1.45bn (€1.17bn) to the Carlyle Group and UK engineering company Meggitt plc, which will split the company.
The deal is expected to complete in August and will represent a 2.5x return on Doughty’s $267m investment made in October 1998 as part of an $855m buyout from BTR plc (now Invensys.)
Following this sale, Doughty will have returned over 100% of drawn commitments to partners in its 1998 $2.66bn Doughty Hanson & Co Fund III, representing 33% of the total costs of the investments made by the fund.
Meggitt is purchasing the aerospace design and manufacturing arm of Dunlop for €609m in cash. The acquisition will be funded in part by a three-for-seven rights issue at 145 pence per share to raise approximately £181.3m (€272m.) The remainder will be financed from a $680m revolver mandated to Banc of America Securities, Barclays, BNP Paribas and Danske Bank. The deal will launch in September.
The Carlyle Group is acquiring the engine repair and overhaul division of Dunlop for €542m, supported by debt from JP Morgan, Lehman Brothers and Credit Suisse First Boston.
This latest exit comes on the heels of Doughty’s disposal of German car parts retailer Auto-Teile-Unger (ATU) to KKR for $1.75bn, returning $850m to investors.