Bain goes for Mr. China’s ASIMCO

ASIMCO is the leading supplier of components to the diesel engine market in China

The sellers are an investor consortium comprising 30 individual shareholders, including Key Capital Partners, the PE arm of Cleveland-based financial services firm KeyCorp, the private equity arm of American International Group, and the International Finance Corporation (IFC), which collectively made a $100 million investment in ASIMCO when the company restructured its operations in 2004. Sources said that the deal includes equity and the assumption of approximately $10 million in debt. The agreement was said to have been finalized in June, but is still up to regulatory approval.

Since its foundation by former US banker Jack Perkowski in 1994, ASIMCO has expanded its operations to become one of the largest independent auto components manufacturers in China. Perkowski was believed to raise about $400 million when he started ASIMCO. The book on his exploits, published in 2004, detailed just some of the vagaries of the early days of foreign manufacturing penetration into China.

Now established as the largest manufacturer of engine components for commercial and heavy industrial vehicles in China, ASIMCO also supplies parts to global makers such as Cummins, PSA, Volkswagon, Haldex and Caterpillar. The company currently has an extensive manufacturing base of 13 facilities and 52 sales offices in China, with regional offices in the US, Europe and Japan.

ASIMCO originally expected to go for an IPO by 2008, with the resulting capital earmarked to cash out existing investors and make further expansion globally through organic growth, as well as acquiring targets such as the US’s Camshaft Specialties Inc. However, changing market fortunes have prompted alternative exit strategies. KPMG pointed out that many auto sector plays now are confronting uncompetitive cost structures and tighter access to credit, and as a result, many distressed assets are potentially up for sale.

AVCJ sources also indicated that a secondary auction of the ASIMCO position had been under way for some time. However, concerns over the asset and market conditions had led to considerable delays and extended due diligence, with Bain finally emerging as the acquirer.

Last year, ASIMCO invited new CEO Gary Riley to replace Perkowski to take further steps to enlarge its business. Perkowski still remains one of the investors in ASIMCO, as well as running his own business consulting firm, JPH Holdings Ltd. Riley said earlier that the company will seek organic growth driven by improving operations over the next few years, not through M&A. 

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• Topics
• Greater China
• Industrials
• Buyouts
• Exits
• Bain Capital Asia
• International Finance Corporation