Carlyle Group Sells Stake to Abu Dhabi

The Carlyle Group, the District's private-equity giant, announced that it is selling a 7.5 percent share of its general partnership to an investment group owned by the government of Abu Dhabi -- one of a flurry of deals today involving Arab governments and U.S. and British financial assets. See story.

The $1.35 billion sale to the Mubadala Development Company marks the second time Carlyle has brought an outside owner into its highly profitable fold. The purchase price values Carlyle, a high profile equity player with longstanding ties to the Middle East, at roughly $20 billion, less a 10 percent discount for the new partners. That is more than six times what Carlyle was valued when the California public pension system purchased about 5 percent of the company in 2000.

Mubadala is wholly owned by the government of Abu Dhabi, the capital of the oil-rich United Arab Emirates. As part of the deal, Abu Dhabi will make a separate $500 million investment into Carlyle funds.

Reminiscent of the Chinese government's recent $3 billion investment into Blackstone Group, a New York-based private equity firm, the money from Abu Dhabi "will add to Carlyle's capital base, strategically expand our business and be used for additional investments," Carlyle executives said in a statement.

The company, which has $76 billion under management, has had some bumps this summer. It pulled one of its properties, Insight Communications, off the market after bidders that included Time Warner Cable had difficulty getting enough bank financing. And in another recent blow, Carlyle made available $200 million in loans to shore up Carlyle Capital, a European affiliate that has been squeezed by the credit-market turmoil.

The Carlyle deal comes on the same day that the governments of two other Arab nations, Dubai and Qatar, announced they were buying large shares of the Nasdaq and London Stock Exchanges -- recycling the cash from recent high oil prices into strategic global investments.

-- Thomas Heath and Howard Schneider

By Mike Shepard  |  September 20, 2007; 9:59 AM ET  | Category:  Carlyle , Private Equity
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