Oriental Fortune agrees $173m China auto parts deal
Chinese mid-market private equity firm Oriental Fortune Capital has agreed to acquire a controlling interest in Changzhou NRB Corporation, a domestic auto components manufacturer, for RMB1.2 billion ($173 million).
Three private investors will transfer full ownership of Guangyang Holdings, which has a 29.61% stake in the Shenzhen-listed company, to Oriental Fortune, according to a filing. The deal is described as a change of control transaction. Changzhou NRB’s stock jumped 10% on June 14 to close at RMB11.04. Further gains took the stock to RMB11.38 on June 17, but it has since slipped back below RMB11.00.
The company manufacturers high-precision products – chiefly wheel bearings and transmission synchronizers – used in traditional and new energy vehicles. It supplies original equipment manufacturers at home and abroad. In 2018, a total of RMB63.2 million was committed to R&D, up nearly 16% on the previous year, and filings were made for 29 new patents.
Ongoing development projects involve products for the local automobile joint ventures of Volkswagen, Ford and Mitsubishi, Great Wall Motor, Geely Automobile, Guangzhou Automobile Industry Group, Baoneng Auto, Scania, and BorgWarner. However, the company warned in its 2018 annual report that China’s first decline in new car sales in more than 20 years had presenting a challenge.
Revenue came to RMB1.35 billion in 2018, up from RMB1.46 billion the previous year. Over the same period, net profit fell from RMB1.51 billion to RMB1.41 billion.
Oriental Fortune was founded in 2006 and claims to manage 42 funds with more than RMB20 billion in assets. It focuses on investments in technology, media and telecom (TMT), environmental technologies, new materials and advanced manufacturing, healthcare, and entertainment and consumption. As of July 2018, it held positions in over 380 companies and had secured 85 exits since inception, 41 through IPO.
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