NEW YORK: Investment fund Blackstone said it will buy US auto parts maker Gates Corporation for $5.4bn from its Canadian owners.
The deal is the second-largest private equity takeover so far this year after Cerberus Capital’s $9.1bn agreement to merge its Albertson’s supermarket chain with rival Safeway.
Blackstone said it had clinched the cash deal to buy all of Pinafore Holdings, the parent company of Gates owned by Canadian private-equity company Onex and the Canada Pension Plan Investment Board. The buyout is Blackstone’s biggest since it acquired hotelier Hilton for $26bn in 2007.
Gates, formerly known as Gates Global, is the world’s leading manufacturer of power transmission belts and a leader in fluid power products for the automobile and other industries. “Gates derives a majority of its sales from replacement markets around the world,” Blackstone said.
Blackstone said the transaction was expected to close this year, subject to regulatory approvals. Gates garnered $2.9bn in sales and $25m in profits in the year that ended September 28, 2013, according to a US securities filing. AFP
