Private equity firm Carlyle Group LP said Wednesday it has priced the initial public offering of 30.5 million of common units at $22 per unit, below its proposed range of $23 to $25 per unit that was already seen as conservative. The company, which has sold a 10 percent stake, raised about $671 million from the IPO.
Carlyle's shares are expected to begin trading on Thursday, May 3, on the Nasdaq Global Select Market under the ticker symbol "CG." The IPO values the company at $6.71 billion.
Carlyle has granted the underwriters a 30-day option to purchase up to 4.575 million additional common units at the public offering price less underwriting discounts.
The company intends to use net proceeds from the offering to repay debt and for general corporate purposes, including general operational needs, growth initiatives, acquisitions and strategic investments, and to fund capital commitments.
Bloomberg had reported earlier on Wednesday that Carlyle may price the initial public offering below its proposed range, between $22 and $23 per share.
The company reportedly chose to price the IPO lower in order to increase the possibility of gains for investors on the first day of trading and for better performance in the longer term. In order to convince investors to buy its IPO, Carlyle had been pricing its stock at a discount to the stocks of other private equity firms.
Carlyle is seeking to avoid the fate of its peers such as Blackstone Group LP (BX) and Apollo Global Management LLC (APO), who are still trading below their IPO prices set in 2007 and 2011 respectively. Blackstone's shares have dropped 58 percent since its 2007 IPO, while Apollo Global Management shares have declined 32 percent.
In addition, shares of alternative asset manager Oaktree Capital Group LLC (OAK) have been trading below its IPO price. The company's shares closed Wednesday's trading at $40.05, below its April IPO price of $45.
Investors have been wary of the lackluster performance of publicly traded buyout firms, and have struggled to value the performance fees in private equity funds due to their convoluted ownership structure.
As of December 31, 2011, Carlyle had about $147 billion of assets under management in 89 active funds and 52 fund of fund vehicles. The company invests across four segments - corporate private equity, real assets, global market strategies and fund of funds solutions.
J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are joint book-running managers for Carlyle's IPO.
Carlyle's founders David Rubenstein, William Conway and Daniel D'Aniello will continue to be the company's largest shareholders after the IPO.
In September 2007, Mubadala Development Co., an investment vehicle for the government of Abu Dhabi of the United Arab Emirates, purchased a 7.5 percent stake in Carlyle for $1.35 billion.
by RTT Staff Writer
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