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by Kate Kelly
Wall Street Journal, December 14,
2001
For the first time in five years,
investors will be offered the chance to buy shares in a new publicly held
defense company.
Shares of United Defense Industries
Inc., an Arlington, Va., manufacturer of guns, armored vehicles, and other
military equipment, begins trading today on the New York Stock Exchange
under the ticker symbol UDI. The offering, which is slated to raise about
$400 million, is a partial spinoff from the large private equity firm
Carlyle Group. After today's offering, Carlyle will retain a majority of
UDI's stock as well as substantial power over the company's board
The company's stock priced
Wednesday evening at $19, the midpoint of the intended $18 to $20 price
range, UDI plans to use the proceeds of the deal to repay bank debt.
In its offering today, UDI joins
the largest group of IPOs to come public in a week since last October,
suggesting that investors may be warming up to the new-issue market again.
By late yesterday, the day's three IPOs, Prudential Financial Inc., Nassda
Corp., and Centene Corp., had all managed considerable gains.
That a company like UDI would elect
to go public this fall isn't surprising, given the events of Sept. 11 and
the subsequent fighting in Afghanistan. Carlyle, which tends to hold
acquisitions like UDI for three to five years, had considered a range of
options, from selling the company outright to undertaking the IPO, said
Allan Holt, a Carlyle partner who focuses on defense an aerospace
investments. "The decision was made in the fall to go out, because you go
out when the market's the best, and the market's good right now for
defense companies," said Mr. Holt.
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