Denmark's NKT sells China cables business to local GP
CAC Capital Management, a China-based private equity firm, has agreed to buy the local power cables business of Denmark-headquartered industrial conglomerate NKT for an enterprise value of EUR14.3 million ($16 million).
The acquisition will be made by Srising Technology, a rail industry supplier wholly-owned by CAC. NKT's China business comprises two plants that produce high-voltage cables and accessories used to power electrified railway lines. All 380 employees will be transferred to Srising.
The Asia Pacific division of NKT Cables generated revenue of EUR88.8 million in the first half of 2016; it includes an Australia sales office that is not part of the Srising transaction.
Michael Hedegaard Lyng, president and CEO of NKT Cables, said in a statement that it has become increasingly difficult in recent years to drive a profitable business in China. The divestment is intended to allow the company to focus on its primary operations in Europe.
NKT recently announced plans to divide its holding company into separate listed entities following the acquisition of ABB's high-voltage cables business for an enterprise valuation of EUR712 million. The Nilfisk division will become a stand-alone professional cleaning equipment manufacturer, while NKT Cables pushes ahead with plans to supply electricity grid infrastructure upgrades within Europe.
CAC was established in 2009 and targets investments in healthcare, information technology and cleantech. According to AVCJ Research, the firm has launched at least eight renminbi-denominated funds, primarily in the venture capital and growth equity spaces.
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