Press Release-FTE Automotive
HG Capital Trust PLC
09 March 2005
The following is the text from a press release issued by HgCapital, which
manages the investment portfolio of HgCapital Trust plc alongside those of other
clients.
On completion of the sale of FTE Automotive, HgCapital Trust plc, a quoted
investment trust that participates in all HgCapital's investments, will realise
a total of £14.2 million, an uplift of £7.1 million against the 31 December 2004
book value. The estimated impact of the realisation on the net asset value of
HgCapital Trust plc would be 28p per share.
HgCapital to sell FTE Automotive to PAI Partners for €370 million
• Two and a half-year investment to generate an equity multiple of 3.7,
capital profit of €145 million and IRR of 90%
HgCapital, a leading European private equity group, announces an agreement for
the sale of FTE Automotive ('FTE'), the world's largest manufacturer of
automotive clutch and brake actuation systems, to PAI Partners, the Paris-based
private equity firm, for €370 million (£255 million).
The transaction, which is conditional upon the approval of competition
authorities in certain jurisdictions, is expected to close in the second quarter
of 2005.
HgCapital acquired FTE for €180 million in December 2002. The firm then
recruited a new management team for FTE, which set about strengthening the
company's world leadership in this significant automotive component sector.
Investments in China and Brazil were followed by the acquisitions of Automotive
Products Inc (US) in December 2003 and the drum brake business of VAP (Slovakia)
in May 2004.
Turnover in the first two full years of HgCapital's ownership rose by 30% from
€286 million to €370 million, with earnings before interest, tax, depreciation
and amortisation also increasing significantly.
In September 2004 HgCapital recapitalised FTE, recouping 1.7 times its original
investment whilst increasing its overall stake in the group. Completion of the
sale to PAI Partners will generate a total capital profit of €145m, 3.7x
original cost, and an IRR of 90%.
Trevor Bayley, a Partner of HgCapital in Germany, commented:
'FTE is a good example of the value which private equity can bring to the German
economy. Under our ownership FTE developed from a domestically-focused,
high-quality automotive supplier to a true global player serving the needs of
its OEM customer base around the world. The new management team, led by Wolfgang
Bruns, has strengthened the company's commercial focus, growing revenues ahead
of the market and investing heavily in new technologies. We are delighted to
find in PAI a new owner, which has strong automotive connections and the
resources to take the company to the next level. We wish PAI continued success
with the development of FTE.
'Our initial investment in FTE was completed at a time when a number of our
competitors were closing their German operations. The success of the FTE
investment provides just rewards to those investors who have supported us in the
expansion of our German business over the last six years.'
Craig Donaldson, a London based partner of HgCapital, said:
'This transaction demonstrates the substantial rewards available in private
equity for those firms equipped and minded to work for them.
'This transaction, our seventh realization event in the last 12 months, further
validates the private equity model we have worked so hard to develop since our
spin-out from Merrill Lynch in 2000. In increasingly competitive markets which
require deeper industry knowledge, HgCapital seeks to drive investment returns
in mid-market private equity through dedicated sector investment teams, a
pro-active approach to portfolio management, and the application of significant
human resources to its investments.'
Enquiries:
HgCapital
Trevor Bayley +49 (0)69 2470 3710
Craig Donaldson +44 (0)20 7089 7922
Maitland
Neil Bennett (UK media) +44 (0)20 7379 5151
David Sturken (German media)
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 17 hours ago Savannah Energy
- 18 hours ago Buccaneer Energy PLC
- 18 hours ago Savannah Energy
- 18 hours ago Carclo
- 18 hours ago Schroder Japan Growth Fund