CITIC Capital, Windjammer buy US valve manufacturer

The purchase price was not disclosed but when the asset was put up for auction in October, it was reportedly expected to fetch in the region of $400 million. The seller was Sentinel Capital Partners, a mid-market US private equity firm that acquired ECI in 2010 through a management buyout.

CITIC is investing through its third international fund, where the typical strategy is to acquire Western companies that are underachieving or underpenetrated in China and help them realize the potential.

ECI is already performing strongly in China - it has a more than 50% share in the LNG space - but the expectation is more capital and support will be required as the country further builds out its LNG infrastructure. It is estimated that the LNG long-haul trucking market in China is expanding at a rate of 50% a year, driven by a combination of government incentives and falling gas prices globally.

The company entered China 3-4 years ago, following on the coattails of a few competitors, and the country now accounts for a significant majority of its sales of LNG valves. Approximately one fifth of overall revenue now derives from the LNG space, up from zero a few years ago. The rest of the business is LPG for which the US remains by far the largest market.

Windjammer is expected to support ECI in the US, maintaining its market leading position for LPG and pushing into LNG. The US trails China in terms of establishing LNG infrastructure.

"ECI is well positioned to capitalize on the emerging growth opportunities in the US, China and throughout the rest of the world as shale gas discoveries, a renewed focus on clean energy and pollution control are spurring investments in natural gas, including the build-out of LNG transportation infrastructure and vehicles," said John Donahue, managing director at Windjammer.

In October, CITIC teamed up with Crestview Partners to buy Canada-based Stackpole International from Sterling Group and Current Capital for $512 million, including debt. It is another automotive-environmental play, with demand for Stackpole's variable displacement pumps expected to rise in China as steps are taken to reduce carbon emissions.

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• Topics
• Greater China
• North America
• Buyouts
• Industrials
• manufacturing
• CITIC Capital Partners
• buyout
• China
• USA
• automobiles