Swedish equity firm EQT buys unit of French auto parts maker Valeo

Swedish-based fund manager EQT Partners said it has agreed to acquire the heavy-duty engine cooling division of French auto parts maker Valeo for an undisclosed amount, reported to be in the region of €100 million or $157.5 million. The business supplies engine cooling solutions to leading manufacturers of trucks, buses, off-highway equipment and industrial diesel engines. In 2007, the division generated sales of 176 million Euros.

EQT used its turnaround and special situations fund to buy heavy duty engine cooling division of Valeo rather than its leveraged buyouts fund despite the target being profitable and able to take a ''reasonable debt'' burden, according to Paul Schrotti, partner at EQT who worked on the deal.

However, he said as the division had been in a challenging market segment requiring integration of its factories and with a strong growth story it was seen as better suited to the €372 million EQT Opportunity fund, which had made five previous deals.

According to EQT, this fund focuses on mid-sized companies which it sees having a sound underlying business and clear value creation potential, but which face business and/or financial difficulties requiring special expertise.

The acquired operations, Valeo Engine Cooling, have 940 employees in three manufacturing sites - two in southern Sweden and one in Jamestown, New York - and last year posted sales of €176 million compared to group sales of €2.5 billion. The unit supplies engine-cooling solutions to manufacturers of trucks, buses, off-highway equipment and industrial diesel engines.

Valeo is a French automotive components manufacturer. It is present in 30 countries and employs 74,800 people at 136 production sites, 68 research & development centres and 9 distribution platforms.

EQT Partners is a private equity firm with approximately €6 billion in equity capital. Founded in 1994 by Investor AB, EQT Partners manages, through holding companies, numerous funds under the EQT banner.

Its current portfolio includes:

• SSP Group comprising Select Service Partner
• ADR-Haanpää Oy
• Bewator AB
• Carl Zeiss Vision Holding GmbH
• Com Hem AB - Jun 2003 - €176 million / 2004
• Contex A/S
• Dometic International AB
• Duni AB
• Eldon Enclosures AB
• Findus AB - Jan 2000 - €559 million / 2004
• FINN-POWER Oy
• Symrise Holding GmbH - Oct 2002 - €1138 million / 2004