Clayton Dubilier & Rice, the buyout firm behind investments
such as wedding gown retailer David's Bridal Inc. and car-rental
business Hertz Global Holdings Inc. (HTZ), is nearing a significant
first close of at least $2.5 billion on its ninth fund, said two
investors with knowledge of the matter.
The close is expected to come toward the end of the month and
would put Clayton Dubilier & Rice Fund IX LP at or above the
halfway mark of the pool's $5 billion goal, the people said, with
one of them adding that the close could be as much as $3
billion.
An executive with New York-based Clayton Dubilier didn't return
a telephone call seeking comment Monday.
Founded in 1978, Clayton Dubilier typically invests in
distribution or services-related companies, as well as corporate
carve outs, valued at $1 billion to $15 billion, the firm said on
its website.
The firm has been navigating a number of its portfolio companies
toward an exit recently, including Hertz and HD Supply Holdings
Inc. (HDS), an industrial and hardware supply company that was one
of the last boom-era buyouts.
Clayton Dubilier, along with Carlyle Group L.P. (CG) and BAML
Capital Partners , which is now part of Bank of America Corp.
(BAC)'s Merrill Lynch unit, acquired Hertz from Ford Motor Co. (F)
in 2005 for $15 billion. Following a series of dividends, secondary
offerings and block sales, Clayton Dubilier and the other backers
exited their stakes in May through a final share block sale valued
at $1.24 billion at the time.
HD Supply, owned by Bain Capital, Carlyle Group and Clayton
Dubilier, was floated on the public market last month, receiving a
lukewarm reception after pricing at $18 a share, sharply below a
$22 to $25 per-share price range. Shares were up 1% to $19.80 each
Monday in 4 p.m. trading.
Clayton Dubilier also sold AssuraMed Holdings Inc., a provider
of mail-order, direct-to-patient medical supplies that it owned
with Goldman Sachs Group Inc.'s (GS) private equity arm, to
Cardinal Health Inc. (CAH) for $2.07 billion this year.
Existing investors have been pleased with Clayton Dubilier's
returns so far, with one of them telling Dow Jones that Fund VIII,
a 2009 vintage which closed on $5 billion, had a net internal rate
of return of 17.6% and a multiple of 1.35 as of the end of 2012.
The 2005 vintage Fund VII that raised $4 billion had a net IRR of
9.1% and a multiple of 1.55, the person said.
Clayton Dubilier has been busy making acquisitions, too. Before
the end of 2012, the firm closed on a couple of deals, namely the
acquisition of David's Bridal for $1.05 billion in October and the
purchase of a significant stake in U.K. discount retailer B&M
Retail Ltd.
A significant portion of the capital in Fund VIII has been
invested, said one of the people with knowledge of the
fundraising.
Clayton Dubilier was partly founded by Joseph Rice III, a
pioneer of the private-equity industry who opted to retire as
chairman last year after 34 years with the firm. In his place,
Donald Gogel, a more than 24-year veteran of the firm, took up the
mantle of chairman and chief executive officer.
(Dow Jones LBO Wire provides coverage of private equity deals,
funds and other related news. Go to http://pevc.dowjones.com)
Write to Michael Wursthorn at michael.wursthorn@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires