3i seals $350m automotive deal

The UK-listed group has purchased a majority stake in US automotive company Hilite, establishing a new fuel efficiency, transmission operation and emissions control platform, says managing partner Ken Hanau.

UK-listed private equity house 3i Group has purchased a majority stake in Cleveland, Ohio-based automotive company Hilite International.

Financial details were not disclosed and 3i did not comment on the value of the transaction, but a source with knowledge of the situation put the price of the deal at around $350 million. Hilite supplies automotive brands with products that enhance fuel efficiency, transmission operation and emissions control. The firm invested from its fifth European buyout fund, which collected $3.5 billion in 2006.

3i partner and global head of automotive investments Ulf von Haacke had been tracking Hilite for several years, and has led the firm on a number of “under the hood” automotive transactions.

Ken Hanau, a managing partner at 3i, told Private Equity International: “This is a new platform that is specifically focused on [fuel efficiency and emissions control] but it’s certainly an area where we’ve spent time in the past.

“When we’re paying $4 a gallon for gas, we think the opportunity to make these cars more efficient from a fuel standpoint is obviously a critical driver,” he said.

Hilite generated revenues of $400 million in 2010, and counts automotive manufacturers Volkswagen, Daimler, General Motors, Chrysler and BMW as customers.