Case Study

Carlyle Group and the AZ-EM buyout (A2): Due diligence

9 pages
September 2009
Reference: IMD-3-2047

Private equity managers are asked to make some of the most complex and gutsy investment decisions. Before any deal is completed, an information gathering and analysis process called due diligence is conducted to assess both the future upside of the potential investment and the possible downside. The Carlyle Group was known as one of the most data-intensive private equity investors in the industry. Carlyle’s due diligence process in assessing the AZ-Electronic Materials (AZ-EM) deal was typical of its rigorous approach. The due diligence process was significantly outsourced, with outside specialists hired in key administrative and operational areas and given very specific instructions by the private equity team. The due diligence conducted to evaluate AZ-EM was particularly intensive because the deal was a carve-out where the accounting and operational records had to be disentangled from those of the parent organization (Clariant). It was orchestrated by Robert Easton and Zeina Bain. The expanded team included not only members of The Carlyle Group and its operating companies, but also Ken Greatbatch, a carve-out specialist, and some 100 other external advisors from Clifford Chance, PwC, A.T. Kearney, ERM, Aon and Accenture. Additionally, UBS, the investment banker, was involved as the potential arranger and syndicator of the debt financing.

Learning Objective

Buyout, due diligence, managing transition, turnaround management, leverage, incentives, restructuring.

Buyout, Private Equity, Turnaround, Leverage, Electronics
Manufacturing, Chemicals
Field Research
© 2009
Available Languages
Related material
Teaching note, Video
Case clearing houses

Research Information & Knowledge Hub for additional information on IMD publications

Discover our latest research
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics