Carlyle eyes over US$4b net on insurance stake deal
Source: Agencies |
January 8, 2013, Tuesday
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Print Edition
Print Edition
CARLYLE Group plans to sell its remaining stake in China's third-largest insurer in a deal valued at up to US$790 million, marking the US private equity fund's most profitable exit ever from an investment.
After several selldowns of its stake in the last two years, Carlyle will net a profit of more than US$4 billion on the deal, or four times the cash it paid. In private equity terms, a profit of two times cash paid for a gain of several hundred million dollars is considered a successful exit.
The Washington-based firm is offering 203 million Hong Kong-traded shares of China Pacific Insurance (Group) Co in a range of HK$30 (US$3.87) to HK$30.30 per share, according to a term sheet of the deal.
Carlyle invested about US$800 million in CPIC between 2005 and 2007 for a 17 percent stake. The firm began to sell its stake late in 2010, exiting portions of its investment in various chunks.
Strong demand for insurance products in China coupled with a bull market led to the surge in CPIC's shares.
The firm raised a total of US$5.1 billion through its CPIC sales, including the most recent offering. That would put Carlyle's profit from the CPIC deal at US$4.3 billion, according to Reuters calculations.
Carlyle's exit of US healthcare company HCR Manorcare is listed at US$6.1 billion, but that deal was financed by loans and came with less profit. Carlyle paid all cash for the CPIC deal.
The sale comes after CPIC's shares surged nearly 40 percent over the past year, reaching a 52-week high last Thursday.
After several selldowns of its stake in the last two years, Carlyle will net a profit of more than US$4 billion on the deal, or four times the cash it paid. In private equity terms, a profit of two times cash paid for a gain of several hundred million dollars is considered a successful exit.
The Washington-based firm is offering 203 million Hong Kong-traded shares of China Pacific Insurance (Group) Co in a range of HK$30 (US$3.87) to HK$30.30 per share, according to a term sheet of the deal.
Carlyle invested about US$800 million in CPIC between 2005 and 2007 for a 17 percent stake. The firm began to sell its stake late in 2010, exiting portions of its investment in various chunks.
Strong demand for insurance products in China coupled with a bull market led to the surge in CPIC's shares.
The firm raised a total of US$5.1 billion through its CPIC sales, including the most recent offering. That would put Carlyle's profit from the CPIC deal at US$4.3 billion, according to Reuters calculations.
Carlyle's exit of US healthcare company HCR Manorcare is listed at US$6.1 billion, but that deal was financed by loans and came with less profit. Carlyle paid all cash for the CPIC deal.
The sale comes after CPIC's shares surged nearly 40 percent over the past year, reaching a 52-week high last Thursday.
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