Carlyle gets green light on $304m traffic safety deal

Carlyle and Macquarie will take private Melbourne-headquartered Redflex, the company behind cameras used in the US to catch red light runners.

The Carlyle Group and Australia’s Macquarie Group have been given the green light to buy Redflex for A$300 million ($304 million; €222.2 million). The traffic safety company's board has unanimously approved the take-private, the firm said in a statement.

Melbourne-headquartered Redflex manufactures and operates traffic safety equipment such as cameras that catch people who run red lights, speed or fail to stop at stop signs. In addition to Australia, the company also has operations in the US, Europe and the Middle East.

Redflex listed on the Australian Stock Exchange in January 1997 and currently has a market capitalisation of A$249.24 million. Company shares were trading at A$18.07 at press time.

Red light camera:
Carlyle watches
 the roads

“Redflex is a great fit with our investment strategy. Redflex offers significant global growth opportunities, particularly in the United States, Europe and the Middle East where there is a growing appreciation for the safety that red light cameras provide,” Brooke Coburn, Carlyle managing director and head of the $680 million Carlyle Growth Partners III, said in the statement.

The statement did not disclose how the shareholding would be split following the transaction and spokespersons from Carlyle and Macquarie declined to comment beyond the release. However a source close to the deal indicated that Carlyle’s stake would be greater than that of Macquarie.

This is not Carlyle’s first joint investment into an Australian asset. In November last year, the firm along with Silicon Valley’s Accel Partners made an undisclosed size investment in online foreign exchange payments company OzForex Group.

Just a month earlier, the firm’s A$2.7 billion proposal to buy Australian hospital chain Healthscope alongside TPG finally met regulatory approval after the duo emerged winners of a private equity bidding war which began in May 2010. Other suitors in that deal had included KKR, CVC Asia Pacific and The Blackstone Group.