3i exits auto parts firm to Chinese buyer, nets 2x return

Hilite makes products intended to improve car fuel efficiency and reduce emissions. 3i acquired the company in 2011 for EUR190 million in an all-equity transaction.

During the holding period, Hilite refocused on its core business of highly-engineered products, committing more than EUR100 million to R&D and capital expenditure. The company also accelerated its expansion into China. From very limited exposure to China at the time of investment, Hilite is expected to derive more than 15% of its sales from the country in 2014.

According to a release, Hilite outperformed the global automotive industry between 2010 and 2013 with a compound annual growth rate (CAGR) of 15%, compared to an industry average of 4.5%.

"We identified Hilite's potential long before we invested in the company in 2011 as it offered highly differentiated technology in the industry's fastest growing subsector: components for fuel efficiency and emissions reduction," said Ulf von Haacke, managing director at 3i."

AVIC Electromechanical Systems is a subsidiary of Aviation Industry Corporation of China (AVIC), one of the country's largest industrial conglomerates.

The deal is still subject to regulatory approval.

This is the second time in a year that 3i has exited a European asset to an Asian strategic buyer. In January is completed the sale of an undisclosed stake in Everis, a Spanish business outsourcing and consulting company, to Japan's NTT Data for JPY50 billion ($492 million).

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• Topics
• Greater China
• Europe
• Buyouts
• Exits
• Industrials
• M&A
• Exit
• 3i Asia Pacific
• Europe
• China
• manufacturing
• Trade sale