Affinity, Unitas in $650m Chinese cleantech exit

The pair has sold Leader & Harvest, a Chinese cleantech company, for $650m, a figure representing more than three times the price paid in late 2009.

Asian private equity firms Affinity Equity Partners and Unitas Capital have sold Beijing-based Leader & Harvest Electric Technologies to French energy management company Schneider Electric for approximately $650 million.

In March, the private equity pair hired Deutsche Bank to advise on the divestment, which was a dual-track process. A source told PE Asia at the time that the deal could be worth around $500 million.

A Reuters report suggested global power company ABB, Siemens AG and Emerson Electric were among the companies interested in purchasing the Chinese company.

Affinity and Unitas invested $200 million in an all-equity deal to acquire 94 percent of Leader & Harvest in October 2009, marking one of the first buyout transactions in a country where making control investments remains to be notoriously difficult.

Established in 1998, Leader & Harvest develops, manufactures and sells medium voltage variable frequency (VFD) drives. VFD technology improves the efficiency of electric motors, saving energy, and is particularly used in energy-intensive industries like oil and gas, power generation, chemicals, cement, metallurgy and transportation.

According to a statement, the company has an annual growth rate in excess of 20 percent in the past few years, and is expected to generate sales of approximately $150 million this year with an EBITDA margin of about 20 percent.

“The transaction enlarges our customer reach and presence in China which is a key market for our business. It also provides us with the opportunity to increase our penetration in a number of countries, especially in the new economies,” Clemens Blum, executive vice president of Schneider Electric’s industry business, said in the statement.