Oak Hill Capital to buy jet engine parts maker Firth Rixson for $2 billion from Carlyle Group, Lehman Brothers Holdings

15 Nov 2007

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Leading private equity firm Oak Hill Capital has agreed to buy British steel-processing company Firth Rixson, owned by the Carlyle Group and Lehman Brothers Holdings, in a transaction valued at £945 million ($2 billion).

Carlyle has a 50 per cent stake in Firth Rixson. Lehman Brothers bought one-third of the company last year through its Coinvestment Partners unit. Firth Rixson managers own the rest of the equity.

The deal will expand Menlo Park, California-based Oak Hill''s holdings in the aerospace industry, which already include component maker Primus International, air cargo hauler Southern Air and a portfolio of aircraft on lease to airlines.

Firth Rixson makes metal components for engines used by the world''s two largest manufacturers of commercial planes, Airbus and Boeing. Oak Hill wants the company to expand into supplying parts for industrial gas turbines and power generation.

The Sheffield, UK-based steelmaker supplies parts to Pratt & Whitney, General Electric and Rolls Royce. Its product portfolio includes parts for the engines of the Boeing 787, the Airbus A380 superjumbo and the in-development Airbus A350XWB.

Carlyle considered taking the company public this year, but decided against it after receiving numerous offers from buyers. The Washington-based Carlyle has owned Firth Rixson for seven years, on the long side for a private equity firm.

Financing for the sale is being provided by Lehman Brothers, GE Commercial Finance and Lloyds TSB Corporate Markets. The purchase will be completed next month.

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