Canada-based private equity firm Onex Corp. (OCX.TO: Quote) and Canada Pension Plan Investment Board or CPPIB, joint owners of UK-based industrial holding company Tomkins, said Friday that CPPIB has agreed to acquire Tomkin's Air Distribution division for about $1.1 billion in cash.
Onex noted that the sale will enable Tomkins to focus on its core Gates business, which makes power transmission belts and hydraulic hoses for the industrial and automotive aftermarket. The transaction is expected to close in the fourth quarter of 2012.
Separately, Tomkins said that CPPIB has agreed to buy all of the equity interests in certain indirect subsidiaries of Pinafore Holdings B.V. that comprise the company's air distribution division.
Onex and CPPIB jointly acquired Tomkins in 2010. Tomkins operates several businesses that serve the general industrial, automotive and construction markets around the globe.
The air distribution division makes air distribution and ventilation products for residential and non-residential buildings, and air movement and control products for industrial and infrastructure applications, in each case primarily in North America.
The division designs and makes a broad range of products that are marketed under many brand names including Titus, Krueger, Ruskin and Hart & Cooley.
Seth Mersky, a Managing Director at Onex said, "With the sale of Air Distribution, we're nearing completion of our planned disposition program well ahead of schedule. We can now focus our efforts on building value in the core Gates business with a significantly de-levered capital structure."
Andre Bourbonnais, Senior Vice-President of Private Investments, CPPIB, said, "With this acquisition, we will acquire directly a significant majority interest in the Air Distribution division, including the portion that we don't currently own indirectly through Tomkins. We look forward to our continued strong partnership with the Air Distribution division's management team to drive the next phase of development for the business."
After its acquisition by Onex and CPPIB, Tomkins has sold five non-core businesses for total proceeds of almost $1 billion, which were primarily used to reduce the company's debt.
Onex manages investment platforms focused on private equity, real estate and credit securities. In total, the company manages approximately $14 billion, of which $9 billion is third-party capital. Onex' businesses have assets of $39 billion, generate annual revenues of $34 billion and employ approximately 235 thousand people worldwide.
Toronto-based CPPIB is a pension fund manager that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. At June 30, 2012, the CPP Fund totaled C$165.8 billion.
In Friday's regular session, OCX.TO is trading on the Toronto stock exchange at C$38.70, up C$0.08 or 0.21 percent on a volume of 3,315 shares.
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by RTT Staff Writer
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