Carlyle Group is the last of the private-equity giants to settle civil charges that it colluded with rivals on tens of billions of dollars worth of deals.
The Washington, DC-based firm, led by David Rubenstein, agreed over the weekend to pay $115 million to settle the federal court case brought by shareholders in the target companies.
Seven PE firms agreed not to step into a rival’s takeout deal, thus cheating the shareholders out of possible robust bidding and a higher takeover price, the suit alleged.
Carlyle, Goldman Sachs, KKR, Bain Capital, Silver Lake Partners, Blackstone Group and TPG Capital neither admitted nor denied guilt.
A November trial date had been set.
While some critics may think the total settlement of roughly $600 million for the alleged collusion in the go-go days from 2005 to 2008 isn’t enough to deter future shenanigans, others point to the deterrence — at least in the near future — of today’s considerably weaker financial environment.
One of the buyouts in the original suit was the $3.4 billion buyout of Education Management by Goldman and Providence Equity Partners in 2006.
This week, KKR, which subsequently bought Education Management bonds, reached a deal to repossess the company after it had broken its loan terms.
KKR and other creditors will acquire 95 percent of Education Management, leaving Goldman with less than a 5 percent stake.