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Private equity firms can’t be all that bad! |
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Feb 13, 2007 at 04:59 PM |
News that AZ Electronic Materials has seen its original private equity investment firm owner (The Carlyle Group) sell a 50 percent stake to another firm (Vestar Capital Partners) highlights that there is life after such acquisitions!
The concern was that when The Carlyle Group acquired AZ from Clariant in 2004, as the German chemical's company wanted to exit the volatile semiconductor and related electronics industries, we would see little left of the company in a few years. Opinion then was that AZ would get split up and high value products such as photoresists would get sold to a rival.
That has yet to happen, and it would seem that AZ has been able to grow its business at a reported 15 percent per annum since the buyout. The company has been authorized by its owner to invest in capacity expansion and seems to have a very good future.
Though press releases coming from AZ have been rather thin on the ground since Carlyle took control, and with few, if any, proper public product announcements forthcoming, AZ seems in good health on the surface.
With everything going well, it may have crossed a few people's minds as to why Carlyle decided to share the company with another investor?
Again, having made some checks, there doesn't seem to be anything sinister going on: rather it is in the natural world order of private equity firms to cash in on acquisitions as soon as possible when things are going well. Realizing some value in AZ is what Carlyle has done, but it hasn't run away just yet, indicating there is more to come from AZ sometime in the future.
Hopefully I will bump into a few old friends at AZ during the SPIE Advanced Lithography Conference in a few weeks time and get their perspective on how things really are! For now though, it would seem private equity firms aren't all that bad!
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