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Carlyle Inches Closer On $2.4B Purchase Deal With Siemens For Mechanical Drive Unit: Report

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Carlyle Inches Closer On $2.4B Purchase Deal With Siemens For Mechanical Drive Unit: Report

Private equity company Carlyle Group Inc (NASDAQ: CG) is nearing a $2.4 billion deal to acquire Flender group — a unit of Siemens AG (OTC: SIEGY), according to Bloomberg. If finalized, the terms of the agreement could be released as early as this week.

What Happened: Carlyle outbid Brookfield Asset Management Inc (NYSE: BAM) for the Siemens mechanical drive unit, Bloomberg reported. Triton Capital Partners and CVC Capital Partners were the other contenders seeking to acquire Flender, according to Reuters.

Flender's valuation, based on its €200 million EBITDA, is forecasted around €1.6 billion to €1.8 billion.

Why Does It Matter: In May, Bloomberg reported that Siemens was exploring the prospects of a spinoff for the Flender unit, simultaneously with a potential sale deal.

With expertise in mechanical drive technology, Flender manufactures gears units, couplings, and transmissions with an extensive portfolio, including businesses like offshore oil extraction and shipbuilding.

Siemens acquired Flender in 2005 for €1.2 billion (approximately $1.5 billion) from Citigroup Inc (NYSE: C).

Price Movement: Carlyle stock closed 0.72% lower at $27.46 and Siemens OTC shares quoted 1.85% higher on Friday at $71.71.

Photo courtesy: Flender

 

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