TORONTO, ONTARIO--(Marketwired - April 4, 2014) -
All amounts in U.S. dollars unless otherwise stated
Onex Corporation ("Onex") (TSX:OCX) and its affiliates (the "Onex Group") and Canada Pension Plan Investment Board ("CPPIB") today announced they have agreed to sell Gates Corporation ("Gates") to private equity funds affiliated with Blackstone for $5.4 billion. The sale is expected to close later this year and is subject to customary closing conditions and regulatory approvals.
Gates is a division of Tomkins, which Onex and CPPIB jointly acquired in 2010 for approximately $5.0 billion. Including the sale of Gates, Onex and CPPIB will have successfully divested eight divisions of Tomkins, for aggregate proceeds of $7.9 billion. Tomkins was a UK-listed industrial holding company operating a number of general industrial, automotive and construction businesses around the globe.
The Onex Group and CPPIB invested $2.1 billion in the Tomkins acquisition. Upon completion of the sale of Gates, the Onex Group and CPPIB will have received aggregate proceeds of approximately $4.7 billion, including prior distributions of $1.2 billion, which will result in a multiple of capital invested of approximately 2.2 times and a return on investment of approximately 26% per annum.
Proceeds from the sale of Gates alone to the Onex Group, including co-investors, will be approximately $2.0 billion, of which Onex Corporation's share will be approximately $550 million, including carried interest. CPPIB's portion of the proceeds from the sale of Gates alone will be approximately $1.5 billion.
Gates is a leading global manufacturer of power transmission belts and fluid power products that are highly engineered and critical components, used in diverse industrial and automotive applications. Gates derives a majority of its sales from replacement markets around the world.
"It was a tough decision to sell Gates. We don't see many industrial businesses with its global brand recognition," said Seth Mersky, a Senior Managing Director of Onex. "Nonetheless, Onex shareholders and our limited partners have done very well. We have thoroughly enjoyed partnering with the Tomkins management team and wish them continued success."
"This has been an excellent investment for CPPIB," said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. "We have enjoyed a very successful partnership with the Tomkins management team and Onex. We believe Gates is poised for continued outperformance."
With offices in Toronto, New York and London, Onex is one of the oldest and most successful private equity firms. Onex acquires and builds high-quality businesses in partnership with talented management teams. The Company has approximately $19 billion of assets under management, including $6 billion of Onex capital, in private equity, credit securities and real estate. Onex invests its capital directly and as the largest limited partner in each of its Funds.
Onex' businesses have assets of $44 billion, generate annual revenues of $33 billion and employ approximately 232,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at www.onex.com. The Company's security filings can also be accessed at www.sedar.com.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board ("CPPIB") is a professional investment management organization that invests the funds not needed by the Canada Pension Plan ("CPP") to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London, Hong Kong, New York City and São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2013, the CPP Fund totalled C$201.5 billion. For more information about CPPIB, please visit www.cppib.com.
This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex and CPPIB are under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.