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UNITED DEFENSE ACQUIRES CARLYLE UNIT

28 May 02. Carlyle Group pulled the plug on a planned initial public offering of its United States Marine Repair Inc. (UDI) subsidiary, deciding instead to sell the ship-repair company to United Defense Industries Inc., a publicly traded company in which Carlyle owns a 49% stake, Wednesday’s Wall Street Journal reported.

United Defense said it agreed to pay $316 million to acquire United States Marine Repair, which performs upgrades and overhauls on ships for the U.S. Navy. United Defense officials said the acquisition “balances and diversifies” the company’s portfolio and “expands our mission to support the U.S. Navy.”…

Comment: This deal is a neat way out of the problems facing floatations and new issues at the moment, the bulk of which are being launched at rock bottom prices. As Carlyle owns both businesses this is a neat way out of the problem, it increases the capital value of United Defense and allows Carlyle to make a neat disposal.

We may see a deal looming for the Northrop Grumman Aerostructures business, also acquired by Carlyle to a buyer such as GKN Aerospace?

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