22 May 2008
And in a further blurring of the relationship between alternative
investment strategies, EQT used its turnround 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 €372m EQT Opportunity fund,
which had made five previous deals.
The acquired operations, Valeo Engine Cooling, has 940 employees in
three manufacturing sites across Sweden and the US and last year posted
sales of €176m compared to group sales of €2.5bn.
Lars Larsson, managing director of Valeo Engine Cooling, said:
“EQT's industrial approach will be valuable for us when implementing our
strategy for the future.”
Valeo had been looking to sell non-core divisions but has faced the
attentions of US hedge fund
Pardus, which has taken a 20% stake in the company and is trying to
have one or two directors of its choice nominated to its board and for
the French company to sell non-market leading operations.
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