Qwest Finds Buyer For QwestDex

August 20, 2002 9:19 PM

Qwest Finds Buyer For QwestDex The buyer is a group led by the Carlyle Group and Welsh Carson Anderson & Stowe. The question is: Why does an investment firm that primarily deals in Defense Contracts want a phone directory company? Tell me I'm just being paranoid.
posted by bas67 (7 comments total)

so these people will own my phone book? weird and creepy. no mention of Poppy Bush though on that page.
posted by billder at 9:34 PM on August 20, 2002

Cash flow.

The article mentions that the books generate $7 billion a year.

I am wondering if this includes their online properties as well. I used to work for one of the more corrupt online yellow pages and they just raked in the cash selling ads.
posted by sciatica at 11:45 PM on August 20, 2002

After David Rubenstein, a former aide in the Carter administration, and William Conway Jr., former chief financial officer of MCI Communications, hooked up at New York's Carlyle hotel in 1987 to form the company, the Carlyle Group spent two lost years investing in a hodgepodge of companies. It wasn't until 1989, when the company brought in Mr. Carlucci, fresh off his two-year stint as U.S. secretary of defense, that Carlyle got serious in government. In 1991 the company made a name for itself by facilitating a $590 million purchase of Citicorp stock for Prince Alwaleed bin Talal. Shortly thereafter, Carlyle snatched up defense contractors Harsco, BDM International, and LTV, turning the companies around and selling them to the likes of TRW, Boeing, and Lockheed Martin.

The Carlyle Group has diversified its holdings since then, investing in everything from bottling companies to natural-food grocers.

From the Red Herring article in January.

And here's their list of "Focused Industries" from their site:

Aerospace & Defense
Consumer & Industrial
Energy
Healthcare
Information Technology
Real Estate
Telecommunications & Media

I'd be more concerned about their connections with companies like this, which was named by Sherman Skolnick and which is apparently well-hidden.

Though it is interesting that one of the two main investors you can find record of

"[f]ormer chairman of the Joint Chiefs of Staff, Adm. William J. Crowe Jr. was part of the crew that sold Saddam Hussein the deadly means to wage war with anthrax germs. That’s when the United States wanted the ‘Butcher of Baghdad’ to use anthrax on Iran," according to Maj. Glenn MacDonald, USAR (Ret), author of Greed and Guinea Pigs: Risking the Health of the U.S. Military. [link]

posted by aflakete at 1:11 AM on August 21, 2002

Strange. I don't know nuthin' 'bout nuthin'. But this sure is strange.
posted by crasspastor at 1:42 AM on August 21, 2002

The Carlyle Group is leveraged buyout group like any other (Thomas Lee, KKR, Apollo, Blackstone), but it has put together a bunch of former government and military people in various positions/relationships and done tons of work on buying military-related companies. But the basic business is borrowing a bunch of money and buying businesses that throw off cash to support that debt.

Yellow pages companies are natural for this type of transaction, and there have already been several big yellow pages leveraged buyouts. Carlyle is just doing what comes naturally - identifying businesses that can be purchased with a high debt component and buying them. It would do the same with a company that designs missiles or underwear or a revolutionary combination of the two.
posted by fluffy1984 at 6:25 AM on August 21, 2002

But there are some people you can't trust, and Carlyle group has many of those.
posted by adnanbwp at 7:28 AM on August 21, 2002

I've spent a fair amount of time figuring out how placing yellow pages directories in the wrong hands could be dangerous. So far, we can all be worried that Carlyle could:

1) Supply yellow pages to police agencies who will use them to beat suspects without leaving telltail bruises and marks.

2) "Accidentally" replace the phone number of Cosmopolitan Escorts with those of the Democratic National Committee or various disarmanent groups.

3) Send coded messages to Al Queda because the web-based coded message system is no longer safe.

There's only so much evil one can do with the yellow pages. I just can't see this being step one on anyone's master plan to take over the world.
posted by fluffy1984 at 7:39 AM on August 21, 2002