Carlyle and BC team for $3.5bn HSI buyout

The private equity duo part-financed one of the biggest deals so far this year using debt provided by six banks, proving lending appetite exists for even multi-billion dollar deals.

Two of the private equity industry's biggest firms have joined forces to agree one of the biggest deals so far this year. 

BC Partners has teamed with The Carlyle Group to acquire Hamilton Sundstrand Industrial (HSI) from New York Stock Exchange-listed United Technologies Corporation for $3.46 billion. In doing so, they reportedly fought off a rival bid from TPG Capital.

The deal comes just one week after it emerged BC had partnered with the Canada Pension Plan Investment Board to acquire US cable group Suddenlink for $6.6 billion.

HSI manufactures pumps and compressors used in a variety of industrial, infrastructure and energy-related applications. It comprises three businesses: Sundyne, which makes high-speed pumps and compressors used mainly in the down-stream oil and gas industry; Milton Roy, which makes metering pumps use in chemical, oil and gas, and water treatment applications; and Sullair, which makes air compressors for the industrial manufacturing sector.

The business has 19 manufacturing facilities in the US, France, China, Australia, the UK, Spain and India.
The private equity pair plans to invest in HSI’s product development activities and to leverage their global footprints to help accelerate its growth, the firms said in a joint statement.

BC is deploying funds from its recently raised BC European Capital IX fund, while Carlyle is using its Carlyle Partners V vehicle to fund the transaction.

Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, RBC Capital Markets and UBS provided debt financing for the deal. Citi and RBC advised the buyout pair on the deal, with Latham & Watkins providing legal advice.

Vipul Amin, a principal of The Carlyle Group, said: “We believe Hamilton Sundstrand Industrial’s strong product mix combined with secular growth trends in the energy, chemicals and industrials sectors create attractive long-term growth prospects for the company.”

The deal is expected to close in the fourth quarter.