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Carlyle to Acquire Minority Stake in a Global Energy Company

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The Carlyle Group (CG - Free Report) announced plans to acquire a significant minority interest in Compañía Española de Petróleos, S.A.U (“Cepsa”) from Abu Dhabi-based Mubadala Investment Company.

Cepsa is a Spanish-based integrated energy company that operates assets across the full petroleum value chain in more than 20 countries. It is also a significant oil producer in Algeria and operates in Central and South America, and South East Asia.

Per reports, Carlyle will acquire 30-40% of Cepsa, valuing the company at $12 billion. Markedly, the deal is expected to close by 2019-end. Notably, Mubadala will continue to be a majority shareholder in Cepsa, Europe’s largest privately-owned integrated oil & gas company.

Carlyle International Energy Partners I and II, Carlyle Partners VII, Carlyle Europe Partners V and co-investors provided equity to Carlyle for this investment.

Marcel Van Poecke, head of Carlyle International Energy Partners, said “We are delighted to partner with Mubadala and Cepsa’s management team through our commitment to invest in Cepsa which offers such strong potential and future opportunities in the global energy sector.”

Carlyle continues to evolve through a combination of organic growth and strategic acquisitions. In March 2019, the company acquired a 9% stake in India's SBI Life Insurance Ltd. from BNP Paribas. Further, in January, it completed the acquisition of a majority stake in Sedgwick, fully replacing its previous majority shareholder KKR, in a deal valued at about $6.7 billion. These inorganic efforts are expected to continue supporting Carlyle’s bottom-line growth.

The company’s shares have gained 6.3% over the past three months, underperforming its industry’s rally of nearly 14%.

Zacks Rank & Key Picks

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same space are Federated Investors ,Franklin Resources (BEN - Free Report) and Ares Management L.P. (ARES - Free Report) , each flaunting a Zacks Rank #1.

Federated‘s Zacks Consensus Estimate for earnings for the current year has been upwardly revised by 5.1% in the past 60 days. Also, its share price has increased 18.7% in the past three months.

Franklin’s earnings estimates for the current year have been revised 2.6% upward over the past 60 days. Further, the company’s shares have jumped 15% in the past three months.

For the current year, Ares’ Zacks Consensus Estimate for earnings has been revised 6.2% upward over the past 60 days. Moreover, its shares have gained 26.3% over the past three months.

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