Blackstone, TPG in $5.5-bn bid to acquire Gates Global
11 March 2014
A consortium that includes private equity firms Blackstone Group and TPG is preparing to offer $5.5 billion to acquire Denver-based British engineering form Gates Global Inc, in one of the biggest private equity transactions in recent times after Cerberus Capital's $9.1- billion purchase of supermarket Safeway announced last week (See: US supermarket chain Safeway in talks over possible sale).
Auto-parts and industrial products maker Gates Global Inc is being sold by Onex Corp and Canada Pension Plan Investment Board, its current owners, reports quoting a person with knowledge of the matter said, adding that the bids are due later this week.
Potential bidders have time till tomorrow to make an offer and the bid by Blackstone and TPG is timed ahead of the Wednesday deadline, sources said.
Gates Global is a leading manufacturer of power transmission belts and fluid power products for the automobile and other industries.
It manufactures and supplies power transmission belts, fluid products and other industrial equipment for customers such as Deere & Co, Daimler AG and Bombardier Inc.
The company posted $25 million in profits on sales of about $2.9 billion in the year ended September 2013, Gates stated in a filing for an initial public offer in December last year.
Gates Global has been working with banks on a sale or an initial public offer (IPO) to raise around $6 billion, according to a Bloomberg report.
Onex and Canada Pension acquired Gates Global in 2010 for about $4.5 billion, 10 years after London-based Tomkins Ltd acquired it in 1996.
Gates Global offers businesses, government bodies and institutions with tailor-made programmes and integrated solutions that addresses key issues, particularly in areas pertaining to cultures assimilation and intercultural intelligence development.