Carlyle bolsters aerospace portfolio with $2.7bn deal

Sequa Corporation, a manufacturer with businesses in industries including aerospace, has agreed to be purchased by The Carlyle Group for $2.7 billion.

The Carlyle Group has agreed to pay $2.7 billion (€2 billion) for Sequa Corporation, a New York-based manufacturer with operations in the aerospace, automotive, metal coating, specialty chemical, and industrial machinery sectors.

Carlyle will pay $175 per share to acquire all of Sequa’s outstanding Class A and Class B shares. The offer price is a 54 percent premium to the shares’ 6 July 2007 closing prices. Debt financing for the transaction will be provided by Lehman Brothers, Citigroup and JPMorgan

The acquisition is subject to shareholder approval, although the executors of the estate of Sequa’s founder, Norman Alexander, possess 54 percent of the company’s shares and have agreed to vote in favour of the transaction. The deal is expected to close in the fourth quarter of 2007, though the company has through 23 August to solicit third-party bids.

Evercore Group is Sequa’s financial advisor, while Cahill Gordon & Reindel is its legal advisor.  Lehman Brothers, Citigroup and JPMorgan are financial advisors to Carlyle, and Latham & Watkins is Carlyle’s legal advisor. Debevoise & Plimpton and Hartman & Craven are legal advisors to the Alexander family.

Peter Clare, Carlyle managing director and head of the global aerospace and defence sector, praised Sequa’s existing management team in a statement, while fellow managing director Adam Palmer noted that Sequa’s diversified operations were particularly appealing to Carlyle.

It is the private equity firm’s second addition to its aerospace and defence portfolio this month. Last week, it agreed to acquire ARINC, a transportation and systems engineering company, for an undisclosed amount.

Carlyle has been highly active of late across numerous sectors, having been linked to around $30 billion in deals in the last two weeks alone. The firm also floated a $300 million debt vehicle on the Euronext exchange last week.