Zoomlion's PE backers exit CIFA holdings for $236m
Chinese construction equipment maker Zoomlion has paid $236 million for equity interests held by Hony Capital, Goldman Sachs and Mandarin Capital Partners in the business unit that was used to buy Italy’s Compagnia Italiana Forme Acciaio (CIFA) in 2008.
The transaction, which saw Zoomlion buy a 60% stake in the European concrete pump manufacturer for EUR163 million ($215 million) is held up as a prime example of how private equity can help corporate China make acquisitions overseas.
Zoomlion said it wanted to assume control of unit, Zoomlion CIFA, in order to bolster its international development strategy and strengthen its core business. The company paid $132.5 million for a 12.77% stake held by Goldman, 8.94% owned by Mandarin Capital and 1.13% controlled by CIFA management. Hony received $103.3 million for 17.84%.
Hony has been an investor in Zoomlion since 2006 and retains a 6.91% stake in the parent company. In partnership with Mandarin Capital and Goldman, it committed EUR108 million to the Chinese company's CIFA acquisition four years ago.
According to details provided in a regulatory filing of the companies' respective holdings in Zoomlion CIFA prior to the most recent transaction, Hony, Goldman and Mandarin Capital have now fully exited the subsidiary.
Zoomlion CIFA reported a net profit of $45.5 million for the first half of 2012, up from $16.3 million for 2011 as a whole.
AVCJ reported in August that Hony and Mandarin Capital would team up to finance the spin-off of Zoomlion's sanitation machinery business. Zoomlion earlier announced that it would invest RMB2.1 billion ($333 million) in this area and proposed setting up a wholly owned unit encompassing waste treatment machinery and other environmental protection equipment.
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