"While our Canadian franchise and culture will continue to be at the core of DBRS' operations, the breadth and depth of both Warburg Pincus and Carlyle's international presence will be invaluable to DBRS at it seeks to capitalize upon its growing platforms in the United States and Europe," said Walter Schroeder, the company's founder and controlling shareholder.
Financial terms of the agreement were kept confidential, but a source close to the deal said it is worth more than US$500 million.
Schroeder will remain an investor in the company.
DBRS is Canada's only independent debt-rating agency. Since the company was founded in 1976, DBRS has grown to be the fourth-largest bond and credit-rating agency in the world, but it remains much smaller than its rivals — Moody's, Standard & Poor's and Fitch.
The company formerly known as Dominion Bond Rating Service employs about 300 people, with its main office in Toronto and other offices in New York, Chicago and London. It rates more than 1,000 companies and issuers of bonds, commercial paper, term debt and preferred shares.
The deal is expected to close in the first quarter of 2015. The company's headquarters will remain in Toronto.
Olivier Sarkozy, managing director and head of the financial services team at Carlyle, said his company will work with the management at DBRS to build out the rating agency's platform overseas.
"The world needs more global ratings franchises that issuers and investors alike can count on to provide timely and insightful ratings on a consistent and impartial basis," Sarkozy said in a statement. "As the world's fourth largest agency we believe DBRS is ideally suited to fill that void."
There are a number of European countries whose economies have been badly battered during the recession that could prove attractive for DBRS as it pursues its expansion, including Spain, Portugal, Ireland and Greece.
The Carlyle Group announced last month that it plans to acquire Toronto-based alternative asset manager Diversified Global Asset Management Corp. for an undisclosed amount.
DBRS faced criticism in 2007 after $32 billion worth of asset-backed commercial paper suddenly became illiquid during the credit crisis, amid fears that some of the assets behind the notes included U.S. subprime mortgages and other high-risk debts.
DBRS had boosted investor confidence in the notes by giving the underlying assets its highest rating. DBRS was the only Canadian agency to rate Canadian non-bank, third-party ABCP, which caused investors to over-rely on the agency's ratings. The agency was later criticized for not detecting the potential risks sooner.