- DIC management team planning buyout with investor support
- Carlyle Group's AlpInvest will also back spinoff plans
Dubai International Capital’s management team is in talks to buy out Doncasters Group Ltd. with financial backing from Blackstone Group LP and Goldman Sachs Group Inc., according to people with knowledge of the matter.
DIC, which is controlled by Dubai Holding, may sell the engineering aerospace group to a group of investors led by the DIC executives for as much as $2 billion, said the people. The investment units of Blackstone and Goldman as well as AlpInvest Partners, an arm of Carlyle Group LP, are backing the transaction, they said.
The backers will partner with the DIC management team, led by Chief Executive Officer David Smoot, and hold an interest in a vehicle that will contain Doncasters, which is DIC’s largest remaining asset, the people said. They may also provide capital for future investments, they said.
The managers plans to work on splitting Doncasters, which operates in the U.S., Europe and Asia, and sell the operations piecemeal rather than as a whole after the transaction, said the people. The group has owned Doncasters since a 2005 buyout from Royal Bank of Scotland Group Plc, which valued the company at 700 million pounds ($1.1 billion).
DIC, which is working with Evercore Partners Inc. on the plan, is disposing of businesses after a property crash in the emirate forced it to reach a deal with creditors to restructure $2.5 billion of liabilities in 2012. A joint sale process for several Doncaster assets last year was abandoned in favor of individual divestments. Packaging specialist Mauser AG and aluminum manufacturer Almatis GmbH were sold in May 2014 and July 2015 respectively.
Dubai government-related entities have spent years since the financial crisis renegotiating with creditors to delay payments and reorganize loans. State-owned company Dubai World reached an agreement with a majority of creditor banks to amend and extend terms on about $14.6 billion of debt in January.
Representatives for AlpInvest, Blackstone, Doncasters and Goldman Sachs declined to comment. Officials at Dubai Holding and Evercore didn’t respond to requests for comment.