EQT exits Chinese die-casting manufacturer

EQT invested in the company in 2010 through its second China and South-East Asia focused buyout fund.

European buyout giant EQT Partners has sold its 30 percent stake in Modern Metal & Precision Holdings to Chinese private equity firm JD Capital for an undisclosed amount, the firm said in a statement.

The Fung family, the company's founders, have also sold their 49 percent stake to JD Capital.

EQT Partners invested in Modern Metal in 2010 through EQT Greater China II, a 2006-vintage buyout fund which closed on $535 million. The fund targets control investments in medium-sized companies based in China and South-East Asia. Typical investment sizes ranged from $20-100 million.

Among its investors are fund of funds manager Pantheon International, Sweden's Investor AB and Swiss asset manager Hermitage & Co, according to PEI Research & Analytics. It has exited more than half of its nine investments in the fund including baked goods company Qinyuan Bakery, Singapore-based Classic Fine Foods, Taiwanese cable TV producer Gala TV and juice producer Yin Rong.

Since its acquisition, the firm has strengthened the company's corporate governance and tapped EQT's industrial experience to support management in strategic planning, marketing strategies, efficiency enhancement, as well as quality improvement initiatives. It had also built its third manufacturing plant in Wuzhou, China in 2012.

Martin Mok, a partner at EQT and investment advisor to EQT Greater China said the company has added three key automobile original equipment manufacturer (OEM) customers and more than doubled its plant capacity and sales.

Hong Kong-headquartered Modern Metal manufactures high-pressure aluminium die-casting for the automotive, climate control, industrial automation and telecom industries. Among its clients are Ford, Jaguar, Land Rover, Honeywell and Valeo. 

EQT has about €30 billion of assets spread over 20 funds, with portfolio companies in Europe, Asia and the US. It had recently closed its €566 million debut venture fund, which seeks to invest in fast-growing European businesses. In April closed its €530 million mid-market credit fund, as reported by Private Equity International.

JD Capital is a Beijing-based private equity firm which manages several renminbi funds and one US dollar fund. It has 240 investments in a number of industries including advanced industrial manufacturing, consumer products and services, pharmaceutical and healthcare, agriculture, natural resources and mining, and clean tech.