Carlyle Expands Global Credit Platform with Acquisition

Firm Manages $5.6 Billion in Institutional Capital and Structured Aircraft Financings

New York, NY – Global alternative asset manager The Carlyle Group (NASDAQ: CG) today announced it has agreed to acquire 100% of Apollo Aviation Group (AAG), a global commercial aviation investment and servicing firm with $5.6 billion in assets under management including 243 aircraft owned, managed or committed to purchase. AAG will become a new business line, operating as Carlyle Aviation Partners Ltd., within Carlyle’s Global Credit Segment. The transaction is subject to customary conditions and is expected to close no later than January 31, 2019.

Established in 2002, AAG raises closed-end funds from limited partners to provide financing solutions to the commercial aviation sector. AAG purchases, leases and manages portfolios of commercial aircraft. This acquisition will allow Carlyle’s Global Credit platform to offer long-duration exposure to commercial aviation markets through a variety of credit, equity and structured finance instruments.

Carlyle Co-CEO Kewsong Lee said, “This corporate acquisition expands Carlyle’s Global Credit capabilities, particularly in the growing asset-based credit market. AAG is a scalable platform with strong growth prospects given its 16-year history and track record of performance.”

Mark Jenkins, Head of Carlyle’s Global Credit Segment, said, “AAG’s expertise in managing and investing in aviation assets and use of long-term fund structures allows it to invest well through economic cycles. We are excited to welcome the highly accomplished AAG management team, which is a proven force in the growing commercial aviation finance market.”

Bill Hoffman, Chairman of Apollo Aviation, said, “The Carlyle Group has demonstrated itself to be one of the leading alternative asset managers worldwide and Robert and I couldn’t think of a better home for the business we’ve built over the past 16 years.”

Robert Korn, President of Apollo Aviation, added, “Joining forces with The Carlyle Group allows us to continue to support our airline customers and play an even greater strategic role in the aviation sector.”

Aviation / Lessor Market Growth

• Global passenger traffic has doubled every 15 years (1973 –2015)

• Passenger growth: 1987 – 1 billion; 2005 – 2 billion; 2013 – 3 billion

• ~41,000 aircraft with a value of ~$6.1 trillion are forecast to be delivered by 2038

• The percentage of operators’ fleets sourced through lessors has grown from 20% to 40% since 1998; expected to grow to 50%+ of the global fleet by 2020

Carlyle’s Global Credit platform, with $36 billion in assets as of June 30, 2018, includes funds in Loans & Structured Credit, Direct Lending, Opportunistic Credit, Energy Credit and Distressed Credit. These businesses have more than 100 investment professionals in New York, Washington, DC, Los Angeles, Chicago, Hong Kong and London.

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About The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $210 billion of assets under management across 335 investment vehicles as of June 30, 2018. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Credit and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,625 people in 31 offices across six continents.

Web: www.carlyle.com
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About Apollo Aviation Group

Apollo Aviation Group is a multi-strategy aviation investment manager that seeks to capitalize on its extensive technical knowledge, in-depth industry expertise and long-standing presence in the mid-life commercial aviation sector. Founded in 2002, Apollo Aviation has total assets under management of $5.6 billion, with over 80 employees and offices in the US, Ireland and Singapore. The company has 243 aircraft owned, managed or committed to purchase, and 11 aircraft engines, with 110 airlines lessees in 58 countries.

Media Contact:

Chris Ullman
+1 (202) 729-5450
chris.ullman@carlyle.com

Public Market Investor Relations:

Daniel Harris
Phone: +1 (212) 813-4527
daniel.harris@carlyle.com

HAMBURG – October 12, 2018 – H.I.G. Capital, LLC (“H.I.G.”), a leading global private equity investment firm with over €24 billion of equity capital under management, is pleased to announce that its portfolio company, CONET Technologies Holding GmbH (“CONET”), a leading IT consulting and software development company, has agreed to acquire Babiel GmbH (“Babiel” or the “Company”).

Founded in 1991 by Georg, Harald and Dr. Rainer Babiel, the Company is a trusted partner to many blue-chip industrial and public customers, offering a range of consulting, managed services and implementation solutions in the fields of online communication and B2B eCommerce. The merger will further strengthen CONET’s resources in its core markets and enables both companies to expand their solutions portfolio within the large and growing IT services market. The management team, headed by the three founders, will remain in place and contribute to the continued success of the Company.

“Combining CONET’s broad customer base and leading solutions portfolio with Babiel’s expertise in online communication and eCommerce makes this an exciting and synergetic combination for our customers,” said Anke Höfer, CEO of CONET. “The three founders have built a highly reputable and innovative company in a fast-growing segment over the past 25 years. We are looking forward to this significant next step in our growth plan.”

Dr. Rainer Babiel, co-founder and Managing Director of Babiel commented, “We look forward to the strategic combination of CONET and Babiel, which will offer considerable benefits for our employees and customers, by joining a market-leading IT consulting group. The combined company will offer a comprehensive portfolio of innovative solutions for our customers and we look forward to cooperating with Ms. Höfer and her team.”

Dr. Holger Kleingarn, Managing Director at H.I.G. Capital, added, “Babiel is a perfect fit to CONET, and the transaction underlines our strong commitment to further grow the Company both organically as well as inorganically. We have been very impressed with Babiel’s management team and look forward to working together. One year after joining forces with ACT Group, this is the second important acquisition milestone following our strategy to strengthen and expand CONET’s position as a leading IT solutions provider in the DACH region.”

About CONET
CONET has been a trusted IT partner for SAP, infrastructure, communications and software since 1987. According to the latest survey by leading German IT publication Channelpartner, CONET is ranked #2 among medium-sized German IT systems and consulting companies. Customers from industry and commerce, the public, as well as defense and security sectors alike value CONET‘s commitment to quality. CONET product solutions for Critical Control Room Communications, Customer Collaboration, Enterprise Content Management and Business Process Management are in use worldwide. CONET currently employs more than 600 businesses and IT specialists at eight locations throughout Germany and Austria. For more information, please refer to the CONET website at www.conet.de.

About Babiel
Babiel is a leading IT services firm specializing in online communication and B2B eCommerce. The company advises, develops, implements and coordinates the creation of websites, online portals, apps, online shops and social media solutions. Babiel has been active in the digital marketplace for over 25 years and possesses a broad range of experience, which has been recognized by numerous awards such as the reddot design award and several awards from the Mobile World Summit. Babiel today employs 100 experts and is headquartered in Düsseldorf. For more information, please refer to the Babiel website at www.babiel.com.

About H.I.G. Capital
H.I.G. is a leading global private equity and alternative assets investment firm with over €24 billion of equity capital under management.* Based in Miami, and with offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, and Atlanta in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Milan, Paris, Bogotá, Mexico City, Rio de Janeiro and São Paulo, H.I.G. specializes in providing both debt and equity capital to small and mid-sized companies, utilizing a flexible and operationally focused / value-added approach:

1. H.I.G.’s equity funds invest in management buyouts, recapitalizations and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses.
2. H.I.G.’s debt funds invest in senior, unitranche and junior debt financing to companies across the size spectrum, both on a primary (direct origination) basis, as well as in the secondary markets. H.I.G. is also a leading CLO manager, through its WhiteHorse family of vehicles, and manages a publicly traded BDC, WhiteHorse Finance.
3. H.I.G.’s real estate funds invest in value-added properties, which can benefit from improved asset management practices.

Since its founding in 1993, H.I.G. has invested in and managed more than 300 companies worldwide. The firm’s current portfolio includes more than 100 companies with combined sales in excess of €28 billion. For more information, please refer to the H.I.G. website at www.higcapital.com.

Deal Represents KKR’s Second Industrials Middle Market Transaction

MINNEAPOLIS & NEW YORK–(BUSINESS WIRE)–Oct. 12, 2018– Quadion LLC, d.b.a. Minnesota Rubber and Plastics(“MRP” or the “Company”), a leading provider of elastomer and thermoplastic solutions, announced today that it is being acquired by KKR, a global investment firm, from Norwest Equity Partners (“NEP”), a Minneapolis-based middle-market equity investment firm. This transaction marks KKR’s second acquisition of a middle-market business in the industrials sector and is being funded through KKR’s Americas XII Fund. Financial details of the transaction were not disclosed.

This press release features multimedia. View the full release here:https://www.businesswire.com/news/home/20181012005034/en/

MRP offers highly engineered elastomer and thermoplastic solutions for medical, water, industrial and other end markets globally. For over 70 years, the Company has built a strong reputation for its ability to design, develop and manufacture products for harsh environments, tight tolerances and technically demanding applications, including multi-material solutions.

“We have been very impressed by MRP’s innovative technologies and differentiated solutions, including over 1,000 custom rubber, plastic and silicone formulations, and tremendous technical resources committed to delivering market leading innovations for their customers. We’re proud to support the Company and see considerable opportunity for it to continue to grow,” said Pete Stavros, Member of KKR and Head of KKR’s Industrials investment team. “As with our other industrials portfolio companies, we plan to implement a broad-based employee engagement model.”

Over the past seven years, KKR’s Industrials team has focused on employee engagement as a key driver in building stronger businesses. The cornerstone of the strategy has been to allow all employees to take part in the benefits of ownership by granting them the opportunity to participate in the equity return directly alongside KKR. KKR also supports employee engagement by investing in training across multiple functional areas, driving improvements in worker safety and by partnering with the workforce to give back in the community.

Jay Ward, MRP CEO, stated, “NEP provided exceptional support and strategic insights to build a strong foundation for growth. We are excited to work with KKR, a global leader who has industrial expertise and a shared vision, to capitalize on this foundation and continue to provide our valued customers integrated elastomer and plastic solutions in critical applications.”

“MRP is a great example of our firm’s investment strategy. Over the last six years, we worked closely with management to significantly impact the performance of the Company to position it for the next chapter of growth and success. KKR is a wonderful fit for MRP,” shared Tim DeVries, NEP Managing Partner.

This transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close by year-end 2018. Fully committed financing has been led by sole arranger KKR Capital Markets and is being provided by Crescent Mezzanine Partners and PSP Investments Credit USA LLC. KKR was advised in the transaction by Benesch, Friedlander, Coplan & Aronoff LLP. MRP and NEP were advised by Houlihan Lokey, Skadden, Arps, Slate, Meagher & Flom LLP, and Ballard Spahr LLP.

About Minnesota Rubber and Plastics

Minnesota Rubber and Plastics is a global leader in elastomer and thermoplastic solutions, with engineering and manufacturing facilities across North America, Europe and Asia. With deep materials science expertise, MRP offers full service capabilities that range from engineering mission-critical components to providing complete manufacturing solutions for technically demanding applications. For more information, please visit www.mnrubber.com.

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic manager partnerships that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

For more information about KKR’s Industrials team and the employee engagement model please visit the KKR Industrials page on LinkedIn, @KKR_Industrials on Twitter and KKR Industrials on YouTube.

About Norwest Equity Partners

Norwest Equity Partners (NEP) is a leading middle market investment firm focused on partnering with business owners to build companies into industry leaders. With a reputation for quality investments and exceptional financial returns since 1961, NEP offers creative and flexible transaction solutions and believes in long-term relationships. Based in Minneapolis, Minnesota, NEP focuses on equity investment opportunities for growing and profitable companies within agriculture, business services, consumer, distribution, diversified industrials, energy, and healthcare. For additional information about NEP, please visit www.nep.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181012005034/en/

Source: KKR

Media:
KKR
Kristi Huller or Samantha Norquist, 212-750-8300
media@kkr.com
or
Minnesota Rubber and Plastics
Mary Pat Pearson, 952-927-2133
mpearson@quadion.com
or
Norwest Equity Partners
Heather Goodwin, 612-215-1676
hgoodwin@nep.com