The Carlyle Group has sold AxleTech International to vehicle parts manufacturer General Dynamics for an undisclosed amount.
The sale comes as the US auto industry struggles to remain solvent, relying on a $17 billion bailout from the US government to save it from collapse.
The deal gives General Dynamics, which mainly serves the US defence industry, the ability to offer its customers new products in the commercial and off-road heavy duty space, a company spokesman said.
Carlyle bought AxleTech in 2005 for an undisclosed amount from private equity firm Wynnchurch Capital. The US-based mega-buyout firm recently eliminated 100 jobs, or 10 percent of its workforce, to cut costs, mostly in back office-type positions.
The deal generated an “excellent return for our investors”, a Carlyle spokesman said, declining to provide financial details of the transaction.
AxleTech, based in Troy, Michigan, is a global manufacturer and supplier of axles, axle components, planetary axles, independent suspensions, brakes and aftermarket parts for military vehicles, commercial trucks and off-road machines used in construction, forestry, mining and agriculture. The company employs about 1,000 people worldwide.
A collapse of US automakers would deal a catastrophic blow to auto parts makers like Delphi and AxleTech. Other private equity firms invested in the sector include WL Ross, Platinum Equity, KPS Capital Partners and IK Investment Partners.