CVC, SCPE generate quick return on Infastech

"We thought it might be worthwhile to explore a sale," says Hans Wang (pictured), senior managing director at CVC Asia. "Once we started the process there were many interested parties, including Stanley Black & Decker. The $850 million price was more than we expected and it has generated an attractive return."

The two firms, which previously teamed up to buy Amtek, another Singapore-based precision manufacturing company, took equal shares in Infastech for approximately $420 million, financing slightly less than half the deal through debt. According to sources familiar with the deal, the investment has generated a return of just under 3x.

Infastech was previously two divisions - Global Electronics & Commercial (GEC) and Avdel - of Acument Global Technologies, one of the world's leading industrial fastener manufacturers and a portfolio company of US-based Platinum Equity. Acument first considered divesting the divisions in 2009 but was uncertain about getting acceptable price at a time when the effects of the global financial crisis were still being felt.

Asia based GEC supplies nuts, bolts and screws to industrial clients across Asia, with a particular focus on the electronics and auto sectors. Avdel, a smaller operation headquartered in London, produces rivets, principally for the European and North American markets. The rationale for divesting these assets was that it would generate capital without undermining Acument's core business serving Western auto manufacturers.

"It was a complex deal," said Roy Kuan, managing partner at CVC Asia. "There were more than 30 entities in the business covering at least 10 countries and because it was a carve-out we had to separate all of these entities from the parent."

There was also an integration challenge. GEC and Avdel were run separately, and while the former was in good health, the latter was exposed to the more difficult European auto markets. The private equity investors and management merged the screws and rivets businesses into a single distribution platform, opening up a new Asia channel for Avdel.

Both divisions have benefited from strong demand from electronics manufacturers in Asia as well as emerging auto sectors in markets like China. Infastech generated revenues of around $500 million in 2011, more than half of which came from the Asia-Pacific region.

It was an obvious target for Stanley Black & Decker. In Emhart, the company already has an established global fasteners business and it wants emerging markets to account for at least 20% of total group revenue by 2015. The Infastech acquisition takes the current share to 16%.

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• Topics
• Exits
• Industrials
• Standard Chartered Private Equity
• CVC Capital Partners
• Exit
• China
• manufacturing