CITIC, Crestview complete $512m buyout

The Chinese private equity firm and Crestview Partners have together taken a controlling stake in North American automotive firm Stackpole International.

CITIC Capital Partners and New York-based private equity firm Crestview Partners have teamed up for the buyout of Stackpole International, according to a statement from the target company. 

Terms of the deal were not disclosed, but a source close to the matter confirmed it was worth around $512 million, including debt. Together, the firms took a controlling stake, with Crestview being the major shareholder. 

Based in Ontario, Stackpole is a supplier to automotive equipment manufacturers and component makers. President and chief executive of the business, Peter Ballantyne, will continue in his role at the company. CITIC and Crestview will both take seats on the company’s board.

The business has prioritised China as a key growth market as the automotive industry in the US and Europe slows, Boon Chew, managing director at CITIC, told Private Equity International. 

Automotive businesses in general need to find a China angle. The European market is fairly weak and the US market is recovering after a bit of a downturn a few years ago. China has been a real bright spot for automotive businesses globally.

Boon Chew, managing director, CITIC Capital Partners

“This is our second automotive deal and both have very attractive China growth characteristics. Automotive businesses in general need to find a China angle. The European market is fairly weak and the US market is recovering after a bit of a downturn a few years ago. China has been a real bright spot for automotive businesses globally,” he explained. 

Other private equity firms in China have also noted the opportunities in the country’s automotive sector. 

In July 2012, Warburg Pincus acquired China Auto Rental, a car rental business, for $200 million, PEI reported earlier. China Resources Capital and Dutch pension fund APG also bet on the sector, establishing a $265 million private equity fund focused on investing in city car parks in China in February this year. 

CITIC Capital is investing from its third international fund, which closed on $562 million in mid-2011, according to the firm. Stackpole is the fund’s eighth investment, although Chew says the fund is still “not that far deployed”. 

The third vehicle is the first to include Europe in its mandate, typically only investing in North American companies with a view to expand in China. CITIC's Fund I and Fund II were too small, only $19.5 million and $60 million respectively, and CITIC didn’t have the resources to tap opportunities in Europe. The firm is yet to do a deal there although it is actively looking.

CITIC Capital Partners is a Chinese private equity fund with both China-focused vehicles and international funds. In China, the firm is currently investing from its second China buyout fund, a $925 million vehicle with a 2009 vintage, according to PEI's Research & Analytics division.