Product details

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Published by: Institute for Management Development (IMD)
Originally published in: 2009
Version: 15.09.2010
Length: 9 pages
Data source: Field research

Abstract

This is the third of a three-case series. Private equity managers are asked to make some of the most complex and gutsy investment decisions. Before any deal is completed, an information gathering and analysis process called due diligence is conducted to assess both the future upside of the potential investment and the possible downside. The Carlyle Group was known as one of the most data-intensive private equity investors in the industry. Carlyle's due diligence process in assessing the AZ-Electronic Materials (AZ-EM) deal was typical of its rigorous approach. The due diligence process was significantly outsourced, with outside specialists hired in key administrative and operational areas and given very specific instructions by the private equity team. The due diligence conducted to evaluate AZ-EM was particularly intensive because the deal was a carve-out where the accounting and operational records had to be disentangled from those of the parent organisation (Clariant). It was orchestrated by Robert Easton and Zeina Bain. The expanded team included not only members of the Carlyle Group and its operating companies, but also Ken Greatbatch, a carve-out specialist, and some 100 other external advisors from Clifford Chance, PwC, AT Kearney, ERM, Aon and Accenture. Additionally, UBS, the investment banker, was involved as the potential arranger and syndicator of the debt financing.
Location:
Size:
Market cap CHF500 million
Other setting(s):
2004-2009

About

Abstract

This is the third of a three-case series. Private equity managers are asked to make some of the most complex and gutsy investment decisions. Before any deal is completed, an information gathering and analysis process called due diligence is conducted to assess both the future upside of the potential investment and the possible downside. The Carlyle Group was known as one of the most data-intensive private equity investors in the industry. Carlyle's due diligence process in assessing the AZ-Electronic Materials (AZ-EM) deal was typical of its rigorous approach. The due diligence process was significantly outsourced, with outside specialists hired in key administrative and operational areas and given very specific instructions by the private equity team. The due diligence conducted to evaluate AZ-EM was particularly intensive because the deal was a carve-out where the accounting and operational records had to be disentangled from those of the parent organisation (Clariant). It was orchestrated by Robert Easton and Zeina Bain. The expanded team included not only members of the Carlyle Group and its operating companies, but also Ken Greatbatch, a carve-out specialist, and some 100 other external advisors from Clifford Chance, PwC, AT Kearney, ERM, Aon and Accenture. Additionally, UBS, the investment banker, was involved as the potential arranger and syndicator of the debt financing.

Settings

Location:
Size:
Market cap CHF500 million
Other setting(s):
2004-2009

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