CITIC Capital partners with 3i for cross-border push

The pair have teamed up for the first time, investing between them €227 million for Formel D, a global service provider to the automotive and component supply industry.

CITIC Capital Partners has teamed up with 3i Group for its first ever deal in Germany with the acquisition of Formel D, a global service provider to the automotive and component supply industry, according to a statement.

The Hong Kong-based private equity firm invested approximately €72 million from its latest China buyout fund, CITIC Capital China Partners III, which held a  $1.6 billion final close in April 2017. Meanwhile, 3i invested €155 million from its balance sheet.

CITIC Capital Partners, the private equity unit of Chinese conglomerate CITIC Capital Holdings, re-tooled its strategy for its latest China-focused fund, expecting to do more investments in the US, Europe and Australia.

CITIC Capital declined to provide details on fund performance.

“Both 3i and CITIC Capital have been active in cross-border automotive transactions over the last 10 years. It is in this context that we've gotten to know each other,” CITIC Capital senior managing director Boon Chew told  Private Equity International.  “Formel D's dominant German presence combined with the strong China presence made this a unique opportunity for 3i and CITIC Capital to partner up on.”

Cologne-headquartered Formel constructs and develops products for vehicle manufacturers and suppliers across 19 countries. The company also provides quality-testing, inspection, management and assurance services. 

The pair's investment will be used to roll out the products and services to clients in other geographies and to add higher value add services such as vehicle test specification and virtual testing.

“With China at the frontier of many of the exciting innovations taking place in the automotive industry like electrification and autonomous driving, both 3i and CITIC Capital plan to leverage its collective resources in the country to help Formel D take advantage of the China opportunity,” Boon added.

In June the firm together with Shanghai-listed company Humanwell Healthcare  acquired the sexual wellness business of Australian company Ansell for A$800 million ($600 million; €534 million).