Unquote

PAI partners sells FTE Automotive to Bain, reaps 3.3x overall return for fund III

  • Ellie Pullen
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PAI partners has agreed to sell its 90% stake in German hydraulic clutch and brakes provider FTE Automotive to Bain Capital in a secondary buyout.

Bain is believed to have made the acquisition through its Bain Capital Europe III fund, which closed in March 2008 on €3.5bn. The deal is expected to be completed in July 2013.

PAI originally acquired the company for €368m in a secondary buyout from UK-based HgCapital in 2005, with a debt facility provided by Barclays.

PAI bought the company via its PAI Europe III fund, which was launched in June 2001 with a target of €1.25bn and closed in August 2002 on €1.8bn. The sale of FTE is believed to be the final exit for the fund, which apparently generated an overall 3.3x multiple and 37% IRR.

HgCapital acquired FTE in 2003, as the lead in a €150m transaction that comprised €34m in equity, €96m in senior debt from Barclays and €20m from a syndicate of mezzanine providers led by Barclays, according to unquote" data. Other mezzanine providers included Duke Street, GE Capital and IKB Deutsche Industriebank.

FTE's turnover increased by 30% to €370m in the two years it was owned by HgCapital and the mezzanine consortium. Under PAI's ownership, revenues increased by a further 16% to €430m.

Debt
Bain's acquisition will be supported by high-yield bonds and a small portion of leveraged loans, news agency Reuters reported.

Company
FTE automotive was founded in 1943 in Ebern. It now has additional branches in Czech Republic, Slovakia, China, Mexico, Brazil and the US.

The company develops, manufactures and supplies hydraulic and electro-hydraulic systems for vehicles, including clutches, brakes, components for gearboxes and sensors such as slave cylinders and actuators.

FTE employs 3,600 staff and recorded a €430m turnover in 2012.

People
Andreas Thumm and Michael Schneider are respectively CEO and CFO of FTE. Michael Siefke is Bain's industrial and energy managing director for Germany. Mirko Meyer-Schönherr is a partner in PAI's German team.

Advisers
Acquirer – Macquarie (Corporate finance); Hengeler Mueller (Legal).
Vendor – Rothschild (Corporate finance); Clifford Chance (Legal).

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