Carlyle to make 2.24x its money with CommScope

Hickory, N.C.-based CommScope, a telecom equipment provider backed by The Carlyle Group, plans to go public this week, selling 38.46 million shares at $18 to $21 each via lead underwriters J.P. Morgan, Deutsche Bank and BofA Merrill Lynch. Of the shares sold, CommScope is offering 30.8 million shares.

Carlyle Group acquired CommScope in January 2011 in a deal valued at $4.3 billion. The Washington, D.C.-based buyout shop, and company management, invested $1.6 billion of equity, according to SEC filings.

Carlyle Group has received about half of its investment back in distributions and dividends. CommScope since 2011 has paid out $750.7 million in dividends and distributions, SEC filings said.

Specifically, last year CommScope paid out a $200 million dividend to shareholders. The company this year issued $550 million in PIK toggle notes and used the proceeds to pay out two dividends. CommScope shareholders received $350 million in May and another $200 million was issued in June.

Carlyle Group owns nearly all, or 98.4 percent, of CommScope’s equity prior to its IPO. The buyout shop appears to have received about $736 million in dividends and distributions.

Sponsors typically don’t sell shares during an IPO, but Carlyle Group is offloading about 7.7 million shares in the offering. At $19.50 a share, the midway point of the expected pricing range, the firm could receive $150 million. Carlyle Group’s stake in the company would fall to about 75 percent, or 138.9 million shares, from 152.4 million shares before the IPO. Their remaining holdings would be valued at $2.7 billion at $19.50 a share.

Including the dividends, stock sale and $2.7 billion in remaining value, Carlyle Group would be showing a 2.24x gain on its investment in CommScope.

Officials for Carlyle Group declined comment.



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