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Carlyle Group and Lehman sell Firth Rixson to Oak Hill

Global private equity firm the Carlyle Group and Lehman Brothers Co-Investment Partners sold Firth Rixson, a supplier of highly engineered rings, industrial forgings and specialised metal

Global private equity firm the Carlyle Group and Lehman Brothers Co-Investment Partners sold Firth Rixson, a supplier of highly engineered rings, industrial forgings and specialised metal products primarily to aerospace engine manufacturers, to Oak Hill Capital Partners for some GBP945m.

Firth Rixson, headquartered in the English city of Sheffield and in East Hartford, Connecticut and Sheffield in the UK, has more than 160 years of history as a specialist engineering firm. Its present form is the result of the integration of three aerospace firms after Firth Rixson was taken private by Carlyle in February 2003.

Following its acquisition, Firth Rixson was merged with Forged Metals, an existing Carlyle portfolio company acquired in 2000 and based in California, and then acquired California-based Schlosser Forge Company in September 2004. The following year the company became the first Western ring-roller to establish its own facility in China.

Over the past four years, Firth Rixson has won substantial new business on current and next generation aero engine platforms as well as in critical industrial applications, establishing itself as a major supplier to its global aero engine and industrial customer base.

In September 2006, Lehman Brothers completed a co-investment alongside Carlyle by acquiring a 36 per cent interest in Firth Rixson, with Carlyle remaining the lead investor. In May this year, the company acquired Future Tech, a California-based business specialising in the machining of ultra large aerospace components.

‘The investment has been a great success for Carlyle and our investors, with our US and European buy-out teams partnering to support the aggressive growth of Firth Rixson globally,’ says Carlyle managing director Bud Watts. ‘We believe it has a very bright future and are pleased that Oak Hill has recognised the great potential of this business.’

Another Carlyle managing director, Robert Easton, adds: ‘Firth Rixson is a fantastic growth story and the company has been transformed over the period of our ownership. Since its acquisition of Firth, the scale of the business has grown tremendously through a successful acquisition strategy and strong focus on operational excellence.

‘From its beginnings in Sheffield over 160 years ago, Firth now operates 11 facilities across the US, UK, Europe and China and supplies products to every major aerospace engine manufacturer in the world.’

Firth Rixson chief executive David Mortimer says: ‘Carlyle has been a great partner for us as they have supported our strategic growth plans with substantial investments in new capabilities and geographic expansion. We are delighted to be partnering with Oak Hill. With the continued support of our experienced and dedicated workforce we will continue to deliver the highest quality products.’

The Carlyle Group invested in Firth Rixson through its US and European buy-out funds, Carlyle Partners III and Carlyle Europe Partners. The sale to Oak Hill is expected to close in December.

Financing is being provided by Lehman Brothers, GE Commercial Finance and Lloyds TSB Corporate Markets. Oak Hill Capital Partners received legal advice from Paul, Weiss, Rifkind, Wharton & Garrison and Macfarlanes. Carlyle was advised by Lehman Brothers and Latham & Watkins.

The Carlyle Group is a global private equity firm that has USD75.6bn under management committed to 55 funds and invests in buyouts, venture and growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America. The firm focuses on aerospace and defence, automotive and transportation, consumer and retail, energy and power, financial services, healthcare, industrial, infrastructure, technology and business services, and telecommunications and media.

Since 1987, Carlyle has invested USD32.3bn of equity in 686 transactions for a total purchase price of USD157.7bn. The firm employs more than 900 people in 21 countries, while in aggregate its portfolio companies have more than USD87bn in revenue and employ more than 286,000 people worldwide.

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