CRCI, Chinese strategic agree $595m carve-out of Bosch unit

The new owners plan to accelerate SG’s growth in China and North America, and help the company maintain its market leading position in Europe. ZMJ said in a filing that on completion of the acquisition it will hold at least 86.16% of SG to CRCI’s 13.64%. Of the total purchase price, EUR440 million will be provided by ZMJ and CRCI, with bank financing covering the rest.

Chengyao Jiao, chairman of ZMJ, said that the deal represented a significant step towards ZMJ becoming a global leader in the auto components industry. The Hong Kong-listed company made its name as a coal machinery manufacturer – most of its revenue comes from hydraulic roof supports – but has sought to diversify its business in response to weaker demand for its core products.

ZMJ entered the auto components space last year with the acquisition of Asimco from Bain Capital Private Equity for RMB2.2 billion (then $337 million), comprising RMB1.65 billion in cash and RMB550 million in shares. Bain retained minority stakes in several Asimco subsidiaries.

SG manufactures high-efficiency starter motors and generators for passenger cars and commercial vehicles, as well as start-stop motors and electric motors for hybrid vehicles. Its employs about 7,000 people across 16 locations in 14 countries, including Germany, China, Brazil, Hungary, India, Mexico, South Africa, Spain and the US. The business had a net asset value of EUR323 million in 2016, while its net profit was EUR2 million, down from EUR4 million the previous year.

“SG epitomizes world class industrial innovation and quality engineering,” said Mark Qiu, CEO of CRCI. “CRCI is honored to act as the catalyst to fuse SG’s capabilities with ZMJ’s experience in China and other markets which offer tremendous growth potential. We are confident that the combination will enable SG to tailor products to emerging market needs, while continuing to supply high quality and cost-efficient products to their current customer base.”

Founded in 2005, CRCI has more than $2 billion in assets under management. The private equity firm finances growth companies in China and also pursues international and local buyout opportunities with a view to helping China-based businesses expand globally.

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• Topics
• Greater China
• Buyouts
• Industrials
• Europe
• China
• manufacturing
• China Renaissance Capital Investment
• Bain Capital Asia