Saturday, July 8, 2017

Carlyle Weaves Profits from Brintons

The Carlyle Group sold British carpet maker Brintons to Argand Partners, another private equity underwriter (PEU).

"Brintons has been a solid investment for us (Carlyle), performing strongly over the last five years in a competitive global market."
"Solid investment" means a multiple on Carlyle's original equity investment, which oddly arose through buying discounted debt and forcing a bankruptcy. Carlyle shed Brintons pension onto the British public.

Carlyle Group took control of Brintons in 2011 by buying an £18m debt it owed to Lloyds Bank and putting it through an insolvency known as a pre-pack administration. The process sent Brintons’ pension scheme, which had 1,600 members, into the Pension Protection Fund (PPF).

The rescue cost the PPF, a lifeboat for troubled schemes, about £21.5m and resulted in benefits cuts of more than 10% for 700 members who were below retirement age.  
Carlyle's profits came on the back of workers, some of who will no longer have jobs.

Historic carpet company Brintons is aiming to axe around 60 jobs at its factory in Kidderminster as it shuts down weaving of Axminster carpets after more than a century.

The latest move comes just 18 months after Brintons cut another 65 jobs from the Kidderminster workforce.
While the sale price is undisclosed some financial information is available:

Its last accounts show earnings after tax had soared 81 per cent to £14.5 million in the 12 months to October 1, 2016.
Often the sale price is a multiple of earnings.  What multiple did Carlyle achieve in its "lucrative sale of a carpet manufacturer that dumped its pension fund?"

Update 7-9-17:  Brintons is "renowned globally for carpeting the White House, the Kremlin and Buckingham Palace."