Security

Blackwater Buy-Out Scuttled

The hedge fund Cerberus Capital Management has decided not to invest in the private security contractor Blackwater USA, Reuters reports. Cerberus, which controls automaker Chrysler LLC and dozens of other companies that generate more than $100 billion in annual sales, had considered investing some $200 million into Blackwater, according to a source close […]

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The hedge fund Cerberus Capital Management has decided not to invest in the private security contractor Blackwater USA, Reuters reports.

Cerberus, which controls automaker Chrysler LLC and dozens of other companies that generate more than $100 billion in annual sales, had considered investing some $200 million into
Blackwater, according to a source close to the situation.

  • "We have made a decision not to pursue a transaction with
    Blackwater," said Peter Duda, a Cerberus representative. He declined to disclose further details about the transaction that it had considered, including its possible size.*

“We decided for a myriad of reasons that it is not an investment that Cerberus is going to pursue,” Cerberus’ operations chief, Mark Neporent, tells the Wall Street Journal.

The deal wouldn’t be Cerberus’s first foray into defense contracting. In May 2004 Cerberus acquired a majority stake in IAP
Worldwide Services, now a Cape Canaveral, Fla.-based contractor providing such services as maintaing a U.S. Army camp near Baghdad and helping maintain Afghanistan’s air traffic control system.

But an investment in Blackwater would also stoke Cerberus’s increasingly unwanted public profile. In a letter to investors earlier this year, Cerberus boss Stephen Feinberg said he despised the attention Cerberus was getting. “We do our best to avoid the spotlight, but unfortunately, when you do some large deals,” he wrote, “it is hard to avoid.”

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