SOURCE: The Carlyle Group

November 11, 2007 05:00 ET

The Carlyle Group and Lehman Brothers to Sell Firth Rixson to Oak Hill Capital Partners for $2 Billion

WASHINGTON, DC and LONDON--(Marketwire - November 11, 2007) - Global private equity firm The Carlyle Group and Lehman Brothers Co-Investment Partners today announce the sale of Firth Rixson to Oak Hill Capital Partners for an aggregate transaction value of approximately £945 million/$1.97 billion. Firth Rixson is a supplier of highly engineered rings, industrial forgings and specialized metal products primarily to aerospace engine manufacturers, headquartered in East Hartford, Connecticut and Sheffield, England.

Firth Rixson has over 160 years of specialist engineering history. The company, in its present form, is the result of the integration of three leading aerospace rings players after the take-private of Firth Rixson plc, a UK listed company, in February 2003 by The Carlyle Group. Over the last four years, Firth has substantially increased its revenues, profit margins and overall operating efficiency.

On acquisition in 2003, Firth Rixson was simultaneously merged with Forged Metals, Inc., an existing Carlyle portfolio company acquired in 2000 and based in California. Firth continued on the consolidation path with the acquisition of California-based Schlosser Forge Company in September 2004. In 2005, Firth became the first Western ring-roller to establish its own facility in China. Over the course of Carlyle's investment, the company has won substantial new business on current and next generation aeroengine platforms as well as in critical industrial applications, establishing Firth Rixson as a major supplier to its global aeroengine and industrial customer base.

In September 2006, Lehman Brothers completed a co-investment alongside Carlyle through an acquisition of a 36% interest in the company, with Carlyle remaining the lead investor in the company. In May 2007, Firth acquired Future Tech, a California-based business specializing in the machining of ultra large aerospace components.

Bud Watts, Managing Director, The Carlyle Group, said, "We would like to thank CEO David Mortimer, former CEO Armand Lauzon and the Firth Rixson management team and employees for their tremendous efforts in building this company since our initial investment seven years ago. This investment has been a great success for Carlyle and our investors, with our US and European buyout teams partnering to support the aggressive growth of the Firth Rixson platform on a global basis. We believe Firth Rixson has a very bright future and are pleased that Oak Hill has recognised the great potential of this business."

Robert Easton, Managing Director, The Carlyle Group, added, "Firth Rixson is a fantastic growth story and the company has been transformed over the period of our ownership. Since Carlyle's acquisition of Firth, the scale of the business has grown tremendously through a successful acquisition strategy and strong focus on operational excellence. From its beginnings in Sheffield over 160 years ago, Firth now operates 11 facilities across the US, UK, Europe and China and supplies products to every major aerospace engine manufacturer in the world."

David Mortimer, CEO of Firth Rixson, said, "Carlyle has been a great partner for us as they have supported our strategic growth plans with substantial investments in new capabilities and geographic expansion. We are delighted to be partnering with Oak Hill as we enter this exciting next stage of our development. With the continued support of our experienced and dedicated workforce we will continue to deliver the highest quality products to our global customers."

The Carlyle Group invested in Firth Rixson through its US and European buyout funds, Carlyle Partners III and Carlyle Europe Partners. The transaction is expected to close in December 2007, subject to regulatory approval.

Financing is being provided by Lehman Brothers Inc., GE Commercial Finance and Lloyds TSB Corporate Markets. Oak Hill Capital Partners received legal advice from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Macfarlanes. The Carlyle Group was advised by Lehman Brothers Inc. and Latham & Watkins.

About The Carlyle Group

The Carlyle Group is a global private equity firm with $75.6 billion under management committed to 55 funds. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $32.3 billion of equity in 686 transactions for a total purchase price of $157.7 billion. The Carlyle Group employs more than 900 people in 21 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world.