The Carlyle Group has made a “significant” investment in Pittsburgh-based NEP Group Inc, a provider of teleproduction services. Barclays and Morgan Stanley provided financial advice to both NEP and existing backer Crestview Partners on the transaction.
The financial terms of the investment are undisclosed.
The investment was made through Carlyle Global Partners – Carlyle’s long-duration private equity (PE) fund – and is described in a press release as a “significant minority investment” alongside existing shareholders Crestview and NEP management.
Carlyle Global Partners is notable for the lifespan of the fund – 20 years – as well as having reportedly raised more than $3 billion of a $50 billion target.
In an interaction with Bloomberg, Tyler Zachem, Managing Director and Co-head of Carlyle Global Partners, had explained: “There are businesses that need capital longer, to build themselves over an extended period, and family-owned companies that don’t want to go public in years three to five.”
“We used to have to have pass on those deals. Now, we can lean in,” he added. This development is in parallel to developments involving private equity (PE) majors such as Blackstone Group LP and CVC Capital Partners who are seeking to deploy funds for longer. This fund pursues investments in targets not synchronised with Carlyle’s flagship PE fund, which seeks an exit event within a a horizon of three to five years.
Eliot Merril, co-head of the fund, explained to Bloomberg: “There are businesses that need capital longer, to build themselves over an extended period, and family-owned companies that don’t want to go public in years three to five. We used to have to have pass on those deals. Now, we can lean in.”
The investment closed on 24 June 24 2016, providing NEP with additional capital and resources to accelerate the company’s growth strategy as a diversified global outsourced services business supporting the broadcast and live events industries.
Carlyle Global Partners LP itself has reportedly invested in excess of US$500 million in two firms as of February 2016 and counts pension funds and sovereign wealth funds (SWFs) amongst its limited partners (LPs).It also charges a lower incentive fee than Carlyle’s main buyout fund. With co-investors, it is reported to lead equity investments of US$1 billion and greater in target firms and seeks to “at least double the value of its investments.
NEP services content producers and owners, providing services related to the broadcast of live sports and entertainment events. It claims to possess the largest fleet of remote production units and global production studios and is headquartered in Pittsburgh, Pennsylvania, with operations in 16 countries and the ability to service clients worldwide.
Commenting on the investment, Kevin Rabbitt, CEO of NEP, said, “We’re very excited to gain another world class partner in Carlyle. Carlyle Global Partners brings media industry expertise, a global network and long-term capital to support our business and worldwide growth strategy. In combination with Crestview, we now have two outstanding investors who share our commitment to innovation, client service and growing our global services platform.”
Carlyle launched its longer-term private equity strategy, Carlyle Global Partners, in 2014 to pursue opportunities that leverage Carlyle’s expertise, resources and global platform in investments that benefit from longer hold periods and structural flexibility. NEP is the third investment in Carlyle’s Global Partners fund.
Speaking on the development, Zachem elaborated: “NEP has all the hallmarks of a Carlyle Global Partners investment – clear market leadership, outstanding management, strong blue chip client relationships, a sustainable value proposition and long-term growth potential.”
“We look forward to partnering with the NEP team and Crestview to support the company’s world class client service and the strategy to become a fully diversified global outsourced production services business,” Zachem added.
The investment in NEP follows its previously announced acquisition of Singapore-based Broadcast Solutions Group, which maintains operations in India, the UAE and UK. This is its first strategic expansion under the new ownership structure, providing it significant reach into Asia while enhancing the company’s outside broadcast flypack capabilities worldwide.