Carlyle Group, aka Bush Inc., cashing in again on IPO
Tempest
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Carlyle Group cashing in again on IPO
Commentary: U.S. Marine Repair is latest offering
By Steve Gelsi, CBS.MarketWatch.com
Last Update: 1:17 AM ET March 17, 2002
NEW YORK (CBS.MW) - Conspiracy theories abound on the Internet. And the
involvement of the Carlyle Group in yet another military contractor IPO
should provide some good fodder, not to mention tales of insider deals
that rival the payoffs from the dot-com era.
Chaired by former Regean administration defense secretary Frank
Carlucci, The Carlyle Group is a $13 billion private equity
firm based just a few blocks away from the White House on Pennsylvania
Avenue in Washington.
Founded in 1987 by two executives hailing from MCI, Marriott and a
corporate merger attorney, it's attracted the most high-ranking
officials in Washington on their way out of jobs in the Oval Office or
elsewhere in the upper echelon of government.
Principals include former British Prime Minister John Major, former
secretary of state, James A. Baker III, not to mention
former chairman of the Securities and Exchange Commission, Arthur
Levitt. Former President George Bush holds the official title of senior
advisor to the Carlyle Asia Advisory Board and gives speeches at events.
Eyeing companies for investment, the Carlyle Group has taken part in
several IPOs over the years including VarsityBooks.com, orthodontic firm
Align Technology and high speed Internet firm NorthPoint Communications.
In October of 1997, The Carlyle Group purchased a majority stake in
United Defense Industries (UDI: news, chart, profile) in the midst of a
slowdown in U.S. military spending following the end of the Cold War.
After Sept. 11, President George W. Bush proposed huge increases in
military spending now pending before Congress.
The languishing defense sector has heated up and with it
military-flavored IPOs have surfaced from several players including
Tuesday's Anteon International (ANT: news, chart, profile), Integrated
Defense Technologies (IDE: news, chart, profile), ManTech International
(MANT: news, chart, profile) and upcoming information technology
specialist Veridian.
The $400 million United Defense Industries IPO was the first to debut in
the latest salvo of weapons debutantes.
When the maker of military vehicles went public in December, Carlucci
owned 40,000 shares at an average strike price of $4.71, according to
the company's IPO filings. The IPO debuted at $19 per share and has
since risen to more than $27 per share.
Carlucci is showing a tidy paper profit of $892,000 on his stake in
United Defense Industries - pretty respectable. Granted, there are
lockup periods governing when insiders can sell their shares, but in
this time of post dot-com meltdowns and a barren IPO landscape, it's
amazing to see that such big profits are still possible.
On Wednesday, Carlyle filed a $160 million IPO for U.S. Marine Repair, a
Norfolk, Va. specialist in maintaining and refurbishing Navy ships.
Although the IPO market may soon tire of all these military deals, this
one should do fairly well and provide another nice payday for The
Carlyle Group.
With access to folks like Secretary of Defense Donald Rumsfeld and Vice
President Dick Cheney, Carlyle seems to have the defense game rigged as
one of the biggest military contractors in the country.
Sure it's just good business to buy low and sell high, but the Carlyle
Group seems to be a bit too well connected.
The company practically evokes classic conspiracy theories about a
shadow government run by entities like the Rockefeller-founded
Trilateral Commission of the 1970s, or the bizarre gatherings of wealthy
white men dressed in robes at California's Bohemian Grove.
The tales continue with the annual Bilderberg conference or the World
Economic Forum at Davos -- events where the world's elite gather to
ponder the direction of Western Civilization.
While it's illegal for former government officials to lobby directly for
private firms, there's nothing on the books right now to keep
ex-officials from helping to raise money for investment ventures
sponsored by companies like the Carlyle Group.
The debate over apparent conflicts of interest will likely continue, but
in the meantime, such companies are providing a nice payday for outgoing
government officials on many fronts, including the IPO market.
--
"I am angry that so many of the sons of the powerful and well-placed...
managed to wangle slots in Reserve and National Guard units...Of the
many tragedies of Vietnam, this raw class discrimination strikes me as
the most damaging to the ideal that all Americans are created equal and
owe equal allegiance to their country."
(Colin Powell’s autobiography, My American Journey, p. 148)
Herb
Government..Except all the rest!
"Tempest" <Tem...@hotmail.com> wrote in message
news:3C954AEF...@hotmail.com...
Mike Blackford
>
> Dear Socialist... It is called Capitalism and is the worst system of
> Government..Except all the rest!
So, you really think capitalism is a 'system of government'?? Wow!
That's a fascinating condemnation of reich-wing philosophy, in itself!
--
"Right knows no boundaries, and justice no frontiers; the brotherhood of
man is not a domestic institution." 覧 Judge Learned Hand (1945)
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Herb
"Mike Blackford" <mblac...@spamcop.net> wrote in message
news:3C955350...@spamcop.net...
> Herb wrote:
> >
> > Dear Socialist... It is called Capitalism and is the worst system of
> > Government..Except all the rest!
>
> So, you really think capitalism is a 'system of government'?? Wow!
>
> That's a fascinating condemnation of reich-wing philosophy, in itself!
>
> --
> "Right knows no boundaries, and justice no frontiers; the brotherhood of
> man is not a domestic institution." -- Judge Learned Hand (1945)