Carlyle Back on Form: $2.5 billion defense private equity deal

May 20 2008 | 2 comment(s)

The Carlyle Group is going back to its roots by buying into the US Government portion of the splitting Booz Allen Hamilton for $2.54 billion.  According to the Washington Post, Carlyle - with about $81 billion in assets and recently known for acquisitions like Hertz and Dunkin Donuts - is now showing that that there is money to be made in defense in this post boom private equity / venture capital markets.

Booz Allen is splitting its US Government practice -- with $3.5 billion a year in revenue and a 20% growth rate - from its global commercial consulting business which has about $1.3 billion in revenue.  The global consulting to be called Booz & Co will continue to be headed by Shumeet Banerji here in London.

Your faithful correspondent has often proposed that startups in security and defense have to jump extra hurdles but it appears that even the big guys have a hard time.  Again from  the Washington Post:

"Booz Allen's defense and corporate consulting businesses are vastly different. The ratio of managers to staff consultants on government projects can be as high as one to 100, while the corporate consultants deploy in small teams for shorter assignments that are measured in weeks, not years. These differences, and others including the laborious security clearance process needed for the government work, influenced the decision to split up the company."

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