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Carlyle Quadruples Axalta Bet for Second-Biggest Profit Ever

 


Bloomberg Markets | August 5, 2016


The Bloomberg Markets article, “Carlyle Quadruples Axalta Bet for Second-Biggest Profit Ever,” quoted Russell Reynolds Associates' Jeffrey Warren about his thoughts on what is needed in today’s private equity world. The article is excerpted below.​

When Carlyle Group LP orchestrated a $4.9 billion buyout of DuPont Co.’s auto-paint business in 2013, competitors said the private equity firm overpaid. Three years later, Carlyle has reaped its second-biggest profit ever on the deal.

The asset manager sold on Tuesday its remaining stake in Axalta Coating Systems Ltd., previously known as DuPont Performance Coatings. The $1.35 billion that Washington-based Carlyle plowed into the deal grew to $5.8 billion, according to regulatory filings, through a series of stock sales starting last year. Those included a $560 million block bought by Warren Buffett’s Berkshire Hathaway Inc.

...

Amid Carlyle’s exit, Axalta isn’t slowing down, announcing four acquisitions on three continents in the past six weeks. Shaver said he wants to increase sales by 50 percent to $6 billion in the next three to five years.

“You have to be creative in today’s private equity world because there’s just too much capital out there chasing deals, and carve-outs are a way to do that,” said Jeff Warren, head of the alternative asset practice at consulting firm Russell Reynolds Associates.

“The firm and its CEO at the company need to be experienced in complex deals, because once the clock starts ticking it’s a race against time to create value.”

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Carlyle Quadruples Axalta Bet for Second-Biggest Profit Ever