Cleveland, Ohio-based Key Principal Partners has led a group of investors in a $100 million (€81 million) recapitalisation of Chinese auto parts maker ASIMCO, giving the firm a majority interest in the company.
ASIMCO, headquartered in Beijing, is the largest independent manufacturer of automotive components in China, with nearly half of approximately $350 million in revenues coming from global customers, according to a press statement. The company sells various automotive parts for passenger cars and diesel trucks. ASIMCO’s product lines are directed to original equipment manufacturers and do not extend in to the automotive aftermarket.
Key Principal partner Leland Lewis said that although his firm typically invests in manufacturing companies in North America, ASIMCO was an attractive buy because of its success in the Chinese market while maintaining global accounting and business standards, which made the company an easier acquisition for a foreign investment entity. Key Principal sourced the deal through its relationship with ASIMCO founder and chief executive officer Jack Perkowski, who originally founded the company as an investment firm that slowly morphed into an operating company. Lewis said ASIMCO is an atypical Chinese company, in that it isn’t a subsidiary of a multinational business, a state-owned enterprise or a local entrepreneurial operation, and that the company is poised to grow on a global scale as China rockets ahead in the auto manufacturing sector.
Key Principal had previously partnered with ASIMCO in 2003, when the company acquired the North American camshaft operations of Federal-Mogul Corporation.
“China is emerging as a major player in the automotive market,” Lewis said. “We’ve seen explosive growth in that sector and the country is projected to very quickly become the third largest automotive markets behind the US and Japan… We see ASIMCO well-positioned for this fairly major paradigm shift in the automotive world.”
Key Principal Partners manages approximately $1 billion in capital that it uses for both private equity and venture capital investments. The firm is affiliated with KeyCorp, which has provided more than half of Key Principal’s equity.