The Canada Pension Plan Investment Board (CPPIB) and Onex have agreed to sell Gates Corporation to private equity funds affiliated with Blackstone for US$5.4 billion ($5.9 billion).
Gates is a division of Tomkins, which Onex and CPPIB jointly acquired in 2010 for approximately US$5 billion.
Including the sale of Gates, Onex and CPPIB will have successfully divested eight divisions of Tomkins, for aggregate proceeds of US$7.9 billion. Tomkins was a U.K.-listed industrial holding company operating a number of general industrial, automotive and construction businesses around the globe.
Onex and CPPIB invested US$2.1 billion in the Tomkins acquisition. Upon completion of the sale of Gates, CPPIB and Onex will have received aggregate proceeds of approximately US$4.7 billion, including prior distributions of $1.2 billion.
CPPIB’s portion of the proceeds from the sale of Gates alone will be approximately US$1.5 billion.
“This has been an excellent investment for CPPIB,” says André Bourbonnais, senior vice-president, private investments, CPPIB. “We have enjoyed a very successful partnership with the Tomkins management team and Onex.”
Gates is a leading global manufacturer of power transmission belts and fluid power products that are highly engineered and critical components, used in diverse industrial and automotive applications.
The sale is expected to close later this year and is subject to customary closing conditions and regulatory approvals.
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