Carlyle Group sells stake to Abu Dubai
9/21/2007WASHINGTON - Private-equity firm Carlyle Group LP, which is to take over Toledo's Manor Care Inc., said yesterday it sold a 7.5 percent stake in its management operations to an investment arm of the government of Abu Dhabi.
Mubadala, one of two investment arms of the Abu Dhabi government, received a nonvoting stake in the company for its $1.35 billion investment. Mubadala also committed $500 million to an investment fund managed by Carlyle as part of the deal.
The two parties said the deal was struck at a "liquidity discount" of 10 percent to the $20 billion valuation of Carlyle that they had agreed upon.
The transaction gives Carlyle a large shareholder and a market valuation, both of which could set the stage for a public offering.
Fellow private equity firm Blackstone Group sold a stake in itself to an investment arm of the Chinese government shortly before going public this year.
Like Carlyle, Blackstone sold a stake in its management operations.
Yesterday's deal gives Carlyle a key partner in the Middle East.
Carlyle spokesman Chris Ullman said the Middle East is a region where Carlyle can achieve strong investment returns.
The firm recently set up a Middle East buyout group, with around 10 professionals working in Dubai, Egypt, and Istanbul.
Carlyle manages about $76 billion in capital in 55 funds. The Mubadala deal is expected to close in October.