WL Ross increases stake in European auto supplier

The turnaround investor now holds 75 percent of Wagon following a €47m special rights offering. London Stock Exchange-listed Wagon designs vehicle structures for brands including Peugeot, Renault, Daimler and Volkswagen.

WL Ross has augmented its automotive portfolio with a €47 million ($69 million) investment in Wagon, a European manufacturer of vehicle body structures for brands including Daimler and Volkswagen.

The private equity firm run by Wilbur Ross has boosted its stake in the London Stock Exchange-listed company, from 15 percent to 75 percent.

In 2006, Wagon merged with French auto parts maker Oxford Automotive Aps, a company in which WL Ross had invested $100 million the previous year – marking the distressed and turnaround investor’s first deal in the auto parts sector. Post-merger Ross was awarded a seat on Wagon’s board.

Sale-leaseback financier WP Carey separately invested €47 million via the company’s special rights offering. Two of WP Carey’s publicly held non-traded REITs have also invested €39 million via a sale-leaseback of Wagon’s manufacturing sites in Waldaschaff and Nagold, Germany.

“The new capital from WL Ross and WP Carey comes at an ideal time,” Richard Cotton, Wagon’s chief financial officer, said in a statement. “It enables us to fund our growth initiatives, support the company’s recent contract wins with IVECO and Porsche, and repay existing debt facilities.”

Wagon was founded in 1918 as a railway wagon repair company. It now employs 6,500 people in 10 countries at 22 plants.

The struggling automotive industry and its affiliated sectors have consistently drawn private equity interest from firms including Hg Capital, Cerberus, PAI Partners, KPS Capital Partners and IK Investment Partners.