Carlyle Group LP has agreed to pay $115 million to settle a lawsuit accusing it of conspiring with other buyout firms not to outbid each other on some takeovers that occurred prior to the financial crisis, a person familiar with the matter said on Friday.
Carlyle was the only private equity firm among those still facing trial not to have settled. It brings the total amount buyout firms have agreed to pay to settle the leveraged buyout collusion charges to $590.5 million.
Like its peers, Carlyle did not admit to any wrongdoing as part of the settlement, the person said, asking not to be identified ahead of any official announcement.
Washington, D.C.-based Carlyle declined to comment.
The money will go to some shareholders of companies that were acquisition targets for private equity during the leveraged buyout boom that predated the 2008 financial crisis.
In a December 2007 lawsuit, private equity firms were accused of conspiring to drive down takeover prices and reduce competition by following “club rules,” often teaming up on buyouts and providing quid pro quos to influence each other’s behavior.
The lawsuit covers eight buyouts in which the firms allegedly agreed not to “jump,” or outbid, each other after buyouts were announced.
Carlyle was one of 11 private equity firms originally sued. Earlier this month, Blackstone Group LP, KKR & Co LP and TPG Capital LP disclosed in a court filing they agreed to pay $325 million to settle the lawsuit.
Last month, Silver Lake Partners LP settled with the plaintiffs for $29.5 million. In June, Goldman Sachs Group Inc and Bain Capital Partners LLC settled for $67 million and $54 million, respectively.
U.S. District Judge William Young in Boston will consider preliminary approval of the accords at a Sept. 4 hearing. Carlyle’s challenge to the class action status of the lawsuit had been scheduled to be heard on the same date.
Apollo Global Management LLC, Providence Equity Partners Inc, JPMorgan Chase & Co and Thomas H. Lee Partners LP all won bids to be dismissed as defendants in the case.
In one case, soon after a KKR-led group in July 2006 agreed to buy hospital chain HCA Inc, a Blackstone executive allegedly wrote that the $32.1 billion price “represents good value and is a shame we let KKR get away with highway robbery.”
In another case, after a Blackstone-led group in September 2006 beat out KKR to buy Freescale Semiconductor Ltd for $17.5 billion, Blackstone President Hamilton James emailed KKR co-founder George Roberts that he would “much rather” work together, and that “in opposition we can cost each other a lot of money.”
(Reporting by Greg Roumeliotis in New York; Editing by Lisa Shumaker and Leslie Adler)
Photo: David M. Rubenstein, co-CEO of The Carlyle Group, speaks at the SALT conference in Las Vegas May 15, 2014. REUTERS/Rick Wilking
Photo courtesy of Shutterstock.