Hong Kong-based private equity firm ShawKwei & Partners has sold industrial tape manufacturer YongLe Tape to Glendale-based labelling solutions company Avery Dennison for $190 million after a five-year holding period.
Along with the purchase price, ShawKwei will receive additional earn-outs of up to $55 million once performance targets are met over the next two years, according to a company statement.
The sale will generate a return of about 4x for investors in Asia Value Investment Fund III, ShawKwei’s $450 million 2010-vintage vehicle, according to a source with knowledge of the matter.
ShawKwei bought YongLe Tape, formerly known as CHT, in March 2012 for $66 million. Founded in 1985, YongLe Tape is a leading manufacturer and distributor of various tape products and is China’s largest global PVC adhesive tape manufacturer. In fiscal year 2016, Yongle Tape reported total revenues of over CNY 1 billion ($145 million; €135 million).
Under ShawKwei’s ownership, the company rebranded all of its business under the “YongLe” brand, consolidated its 12 distribution and warehouse centres into a single large mega-factory, and underwent extensive technology and equipment upgrades.
Commenting on the transaction, which is expected to close in mid-2017, Kyle Shaw, ShawKwei managing partner, said: “Chairman Wong and the management team have built an outstanding business servicing leading customers around the world. It has been a rewarding journey the past several years participating with them in the development of YongLe Tape into a leading pressure-sensitive wire harnessing tape manufacturer.”
Mid-market focused firm ShawKwei has over $500 million in assets under management and invests in industrial and service companies with operations in Asia, and with revenues between $100 million to $800 million.