Carlyle Group exits from Butterfield Bank – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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Carlyle Group exits from Butterfield Bank

The Carlyle Group has exited its position with Butterfield Bank after seven years as its largest shareholder.

Following the closing of Butterfield's registered secondary offering by a number of shareholders, Carlyle no longer own any common shares in the bank, and an investment agreement between it and the bank has been terminated.

However, US-based Carlyle, one of the world's largest investment groups, still has two nominated members on the Butterfield Bank board of directors, and both have agreed to stand for re-election for a further year.

In 2010, Carlyle was one of the key investors that put $550 million into the bank as part of a recapitalisation programme. That helped Butterfield overcome difficulties it faced after it lost millions of dollars as a result of the US subprime meltdown.

It was always expected that Carlyle would move on after five to seven years. Last September, Butterfield joined the New York Stock Exchange after a successful initial public offering. The listing has given the bank's stock greater liquidity.

The secondary offering encompassed 10,989,163 voting ordinary shares, including all those of Carlyle's affiliates. The price was $31.75 per share. Butterfield did not receive any of the proceeds from the sale.

Before the sale, Carlyle and its affiliates had owned 7.6 million of the stock.

Michael Collins, Butterfield's chief executive officer, said the bank was pleased the secondary offering had been well received by the market.

He added: 'I would like to thank Carlyle for its investment and advice over the past several years as we worked together to restructure the bank.

'It has been a strong partnership, an alignment of capital and strategy that has repositioned Butterfield as a leading independent bank and trust company with a bright future.'

He added: 'James Burr and David Zwiener, who were nominated to serve on Butterfield's board by Carlyle, have agreed to stand for re-election at the annual general meeting to serve as directors for a further year.

'The bank will benefit from both the continuity of leadership and the financial services experience that Jim and David bring to our board.'

Goldman, Sachs & Co, Citigroup, Sandler O'Neill & Partners and Keefe, Bruyette & Woods acted as the joint book-running managers, and Raymond James and Wells Fargo Securities acted as co-managers for the offering.

The bank's share price has gained nearly 40 per cent since last year's IPO. On Tuesday, the shares rose 41 cents in New York to close on $32.60.

Disclosure: the writer of this article owns shares in Butterfield Bank

Moving on: Carlyle Group was one of the leading investors that helped recapitalise Butterfield Bank in 2010 after the bank lost millions of dollars as a result of the US subprime meltdown. Carlyle has now sold all its shares in the bank