China’s Avic buys Hilite International with $644M Deal

China’s Avic Adds to Auto Parts M&A with $644M Deal

London-headquartered middle-market private equity firm 3i Group plc says it has sold its portfolio company Hilite International, a global supplier of highly engineered automotive engine and transmission components, to Chinese state-owned aerospace and industrial company Aviation Industry Corporation of China (AVIC), according to an announcement made by 3i.

During 3i’s ownership, Hilite accelerated its expansion into China, the fastest growing automotive market in the world. China is expected to contribute more than 15% of total sales to Hilite in 2014, up from very limited revenue generation in 2011.

Under seller 3i’s ownership, Hilite expanded in China — the fastest-growing car market in the world

n the latest car parts deal, Avic Electromechanical Systems Co. Ltd. has purchased Hilite International from private equity firm 3i Group plc for €473 million (U.S. $644.1 million).

The target supplies automotive engine and transmission parts for passenger cars and commercial vehicles. Hilite is headquartered in Marktheidenfeld, Germany, and has offices and production plants in North America, Europe and Asia. The company’s U.S. locations include a sales and research development center in Orion, Michigan, and development and production sites in Whitehall, Michigan, and Dallas.

3i invested in Hilite in 2011. Under the PE firm’s ownership, Hilite invested in research and development and expanded in China, which is the fastest growing automotive market in the world. 3i made a 2.1x return on its approximately $281 million investment, the company says.

The buyer is a Chinese company that focuses on manufacturing seat-adjustment components to the car market.

Morgan Stanley Bank AG served as 3i’s financial adviser, while Willkie Farr & Gallagher LLP provided legal advice.

The transaction follows a long line of car-parts deals, including AGM Automotive LLC’s purchase of Chicago Miniature Lighting LLCin May, and Z Capital partners LLC’s purchase of MSD Performance Groupin December. For more on the sector, see “Winners of the Auot Aftermarket.”