FountainVest buys majority stake in US-based Key Safety Systems
FountainVest Partners has acquired a controlling interest in Key Safety Systems (KSS), a US-based auto components manufacturer that has considerable exposure to China. Canada Pension Plan Investment Board (CPPIB) is participating as a co-investor.
The deal facilitates a partial exit for Crestview Partners, which bought the company in 2007 alongside management. Both Crestview and management retain equity stakes in the business. Jason Luo will continue to serve as KSS CEO as well as sitting on the board of directors.
The size of the transaction was not disclosed, but when Bloomberg reported FountainVest's interest in the asset earlier this year, a valuation of $700-800 million was mooted.
"KSS has emerged as an industry leader well recognized for its reliable technology, high quality global manufacturing footprint, customer focus and diversified revenue base," Frank Tang, co-founder and CEO of FountainVest, said in a statement. "We see excellent growth prospects for KSS in both the rapidly expanding Chinese market and the broader global market as customers seek to improve the safety of their cars."
KSS' portfolio of automotive safety components and systems include inflators, airbags, steering wheels and seat belts. They are used in more than 300 vehicle models produced by more than 60 customers worldwide. Headquartered in Michigan, the company has 28 sales, engineering and manufacturing facilities. Its five main technical centers are located in the US, Germany, China, Japan and South Korea.
FoutainVest is currently investing its second China-focused fund, which closed in late 2012 at $1.35 billion, with CPPIB among the LPs.
The deal is further evidence of Chinese private equity firms' growing interest in US acquisitions and helping companies fully realize their China growth potential. They often work in partnership with US-based private equity firms and divide up the geographical responsibilities, although intermediaries increasingly approach Chinese PE and strategic players directly.
CITIC Capital Partners has participated in a number of these transactions - last year it teamed up with Crestview to buy Stackpole International - and in June completed its first US deal as lead investor.
Goldman Sachs and UBS advised KSS on the deal, while Davis Polk served as legal counsel to Crestview. FountainVest was advised by Citigroup and Latham & Watkins.
More on Buyouts
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.