Carlyle Announces Deal For Steel Company

By Thomas Heath

The Carlyle Group today announced an agreement to sell its interest in U.S. steel pipe and tube manufacturer John Maneely Co. to Russia's Novolipetsk Steel for $3.53 billion, according to the District-based private equity firm.

Carlyle purchased the steel company in March of 2006 and has increased sales by $800 million since that time. Revenue this year is projected to reach $3 billion, Carlyle said in a news release.

One source who spoke anonymously because he was not authorized to speak publicly said Carlyle realized "several times" the investment it made in the company two years ago.

JMC of Beachwood, Ohio, a family-run business, operates 11 plants in five states and can produce more than three million tons of steel pipe and tubes per year, making it the largest independent tubular manufacturer in North America.

The firm shipped 2.1 million tons of pipe in the 12 months ending June 30, generating $2.4 billion of revenue and $485 million in earnings before interest, taxes and depreciation.

"This is a great example of how private equity can help create value." said Daniel A. Pryor, a Carlyle managing director who led the deal.

NLMK is headquartered in Lipetsk, Russia, NLMK is a leading steel producer with annual revenues of approximately $7.7 billion and 70,000 employees in production facilities across Russia, Europe and the United States.

Carlyle is one of the largest private equity firms in the world, with more than $82 billion under management.

By Dan Beyers  |  August 12, 2008; 6:10 PM ET
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Good for Carlyle - a nice chunk of change while the dollar is weak, adding significant purchasing power to foreign buyers.
First Budweiser... Now the largest independent tube manufacturer in the U.S.
Bush's weak dollar policy is helping a few families, while increasing foreign ownership of American companies.
We should be teaching foreign languages in U.S. schools.

Posted by: Carl Eisle | August 12, 2008 9:10 PM

The deal announced by Carlyle Group is a good one. This is a good time for them to sign this deal as there is a fall in dollar value.


Washington Treatment Centers

Posted by: julie | August 12, 2008 11:44 PM

Please, please, everyone---read Naomi Klein's "The Shock Doctrine". This methodology is explained therein and follows perfectly what Carlyle is doing throughout the world. The falling dollar, manipulated by the Bush administration, allows his cronies to make billions. And to sell this company to the Russians,yet.

Posted by: Frank | August 13, 2008 5:27 PM

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