HD Supply not impacted by Carlyle Capital difficulties, CEO says

Industrial Distribution staff -- Industrial Distribution, 3/14/2008 8:01:00 AM

The financial difficulties and impending collapse faced by Carlyle Capital—an Amsterdam-listed affiliate of the Carlyle Group—will have no impact whatsoever on HD Supply, CEO Joe DeAngelo said in an interview with Industrial Distribution March 13.

“It doesn’t impact our debt structure,” DeAngelo said. “It’s completely separate and really has nothing to do with our fund.”

The Carlyle Group is one of the private equity owners of HD Supply, along with Bain Capital Partners and Clayton, Dubilier & Rice.

“[Carlyle] separates their funding mechanisms. ... There’s absolutely nothing externally that will impact what we have,” DeAngelo told Industrial Distribution. “We have a great capital structure. We’re in really good shape. That’s one [distraction] I don’t have to worry about.”

  Carlyle Capital was on the verge of a collapse March 13 after refinancing talks failed, prompting a default on its debt. A $150 million credit line from the Carlyle Group was still not enough to keep Carlyle Capital from difficulties.

“We’re working to find ways to help people to deal with losses and maybe recover some capital,” David Rubenstein, co-founder of the Carlyle Group, told The New York Times March 14. 

The Carlyle Group currently has approximately $75 billion under management in 55 different funds. It once owned Rexnord Corp., a power transmission and motion control products manufacturer. Carlyle acquired the company in 2002 in a partnership with George Sherman, former CEO of Danaher Corp., and sold it in 2006 to Apollo Management. 

The private equity firm also owns the John Maneely Co., a manufacturer of welded steel pipe.

Carlyle Capital was established in 2006 by the Carlyle Group, and went public in 2007.

In a statement, the Carlyle Group said it was connected to the fund by name only, the credit line and that about 15 percent of Carlyle Capital’s securities were owned by Carlyle Group employees.