* Asia-focused PE firm buys European asset Hyva
* Hyva generates most of revenue from Asia
(Updates with confirmation, background on Chongqing, loans)
By Michael Flaherty and Stephen Aldred
HONG KONG, Dec 15 (Reuters) - Unitas Capital agreed to buy 3i Group Plc’s (III.L) Dutch pump manufacturer Hyva for about 525 million euros ($700 million) including debt, in a rare example of an Asia-focused fund buying a European asset.
In a joint statement, 3i and Unitas, which is JPMorgan’s former Asian buyout arm, said the deal — earlier reported by Reuters, citing a person with direct knowledge of the matter — would complete in the first half of next year.
The Financial Times had estimated the business could fetch 500 to 600 million euros. 3i will make a return of about seven times its initial investment.
Hyva makes hydraulic components for heavy industrial machinery, and generates most of its sales from China and India, although it is headquartered in Europe.
Many banks had lost interest in supporting bids from private equity firms because of problems structuring a deal across two continents, loans bankers said.
Hyva’s earnings before tax, depreciation and amortisation (Ebitda) also halved to 35 million euros in 2009 due to a poor performance in Europe.
But with few buyout deals in Asia this year and Ebitda expected to reach 65 million euros on strong Asian sales, rival private equity firms Bain Capital LLC, Permira [PERM.UL] and Nordic Capital also chased bank debt for the asset.
Hyva generated interest from China’s Chongqing Machinery & Electric Co (2722.HK). That bid failed to get financing in time and came in low, a source familiar with the matter said.
Unitas plans to relocate Hyva’s headquarters to Asia to take advantage of strong regional sales, Unitas Chief Executive Andrew Liu said in November.
BAML was lead financial adviser to Unitas, while Credit Suisse advised 3i.
Unitas’s bid is backed by loan financing from Bank of America Merrill Lynch (BAC.N), Goldman Sachs (GS.N), Nomura (8604.T) and Standard Chartered Bank (STAN.L), a source with direct knowledge of the matter said.
The sources were not authorised to speak publicly about the matter and declined to be named.
Unitas has one other major “Asia-linked global” investment in its portfolio, British vacuum pump maker Edwards. Unitas and co-owner CCMP, another former JPMorgan arm, plan to list Edwards next year. [ID:nLDE6BD0G8]
Additional reporting by Quentin Webb in London; editing by Jon Loades-Carter and David Hulmes