London-headquartered middle-market private equity firm 3i Group plc says it has sold its portfolio company Hilite International, a global supplier of highly engineered automotive engine and transmission components, to Chinese state-owned aerospace and industrial company Aviation Industry Corporation of China (AVIC), according to an announcement made by 3i.
The US$18.5 billion-under-management 3i Group will receive US$259.5 million in proceeds from the latest sale. In total, proceeds received by 3i represent around two times of its original investment of US$288 million made in 2011, according to the announcement.
The enterprise value of the transaction is approximately US$643 million.
A spokesperson at 3i Group confirmed to China Money Network that the investment in Hilite was made from its Eurofund V, which is comprised of 3i Group’s own money and third-party investors. The investment into Hilite was split between 3i Group’s own money and third-party investors by 55% and 45% respectively.
Hilite, headquartered in the town of Marktheidenfeld in Germany, produces products that improve fuel consumption, reduce emissions and enhance performance.
During 3i’s ownership, Hilite accelerated its expansion into China, the fastest growing automotive market in the world. China is expected to contribute more than 15% of total sales to Hilite in 2014, up from very limited revenue generation in 2011.
“We are now a more focused Company with global presence, particularly in the important China market,” says Hilite’s CEO Karl Hammer. “In AVIC, we have an ideal new shareholder who will help us capitalize on our strengths and position in China and other markets around the globe.”
