2024-09-23 06:15:00 :
Global private equity firm Carlyle is setting up a $400 million platform in India to acquire and merge auto parts makers, two people familiar with the matter said.
Carlyle is likely to acquire at least two parts makers before the end of this fiscal year and two more in the next 12-18 months, the people said, speaking on condition of anonymity, adding that the The company will focus on companies in the electric vehicle segment as well as export-oriented companies.
Auto Parts Focus
“The company is looking to build a business focused on auto parts, specifically precision machined and forged parts for electric vehicles,” one of the two people said. “It will look to acquire mid-sized companies and integrate them.” ,” he added. In addition to electric vehicles and exports, Carlyle will also make smaller investments in commercial vehicle parts makers.
The private equity firm will seek to gain a controlling stake in its investment, the people said. Carlyle did not respond to a request for comment Sunday.
Because Carlyle has yet to find a suitable large business, it will acquire smaller businesses for later integration, a so-called roll-up merger, the people said.
In August, Carlyle acquired Worldpac, a leading North American automotive aftermarket parts supplier, from Advance Auto Parts for $1.5 billion.
“They strongly believe in this thesis and want to replicate it in other markets. Apart from being a huge domestic consumer market, India can also develop into an export hub, especially in the auto component sector, so it seems to be a lucrative opportunity,” a second person added.
competitor success
Other private equity firms have also had success with auto parts platforms.
Carlyle Group India head Amit Jain, who previously served as a managing director at Blackstone, led the investment in Sona Comstar, a company that supplies auto parts to electric vehicle makers. Blackstone created Sona Comstar by acquiring 100% of Chennai-based Comstar with an investment of approx. $1,000 crore and subsequently merged with Sona BLW. When Blackstone exited Sona Comstar, it earned almost 12 times its initial capital.
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Rival Bain Capital is also creating an auto parts platform. On Sept. 17, the private equity firm said it was investing in RSB Transmissions, which makes automotive, construction and off-highway equipment systems and aggregates. Bain said it will provide funds to pursue strategic mergers and acquisitions opportunities and establish a diversified platform through RSB. “We are working closely with the Behera family (the founders of RSB) to build a larger and more diversified platform,” Bain Capital partner Rishi Mandawat said last week.
second indian platform
This will be Carlyle’s second platform in the generics space after partnering with Viyash Life Sciences in 2021. Through the platform, The Carlyle Group acquired niche API maker Symed Labs to enable backward integration.
Carlyle is likely to draw investments from its new sixth Asia buyout fund, which has so far received up to $3 billion in commitments, down from its original target of $8.5 billion. On August 13, Bloomberg reported that the investor had postponed the launch of its sixth Asian buyout fund because its Japan-focused fund had sucked interest from its regional funds.
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