LONDON Private equity firm Bain Capital has agreed to buy German clutch systems maker FTE automotive PAIPRF.UL from PAI Partners, the companies said on Monday.
The deal is the latest in a series of successful private equity transactions involving German targets this year, following the sales of insulation company Armacell and metering business Ista, suggesting that private equity investors have faith in Germany's economic prospects.
PAI acquired FTE from HgCapital in 2005, financed with 320 million euros ($415 million) of leveraged loans. It raised an additional 60 million euros of debt in 2006, part of which was used to pay itself a dividend.
PAI attempted to sell FTE in 2008 for 400-500 million euros, Thomson Reuters LPC data shows, but the sale fell through amid the economic slowdown.
Rothschild advised PAI on the latest sale, while Bain was advised by Macquarie and Morgan Stanley (MS.N).
Bain's acquisition, for an undisclosed sum, will be backed with debt financing led by Morgan Stanley, mainly consisting of high-yield bonds and a small portion of leveraged loans, banking sources said. ($1 = 0.7709 euros)
(Editing by David Goodman)