Johnson Electric Holdings Ltd. (SEHK: 179) is buying private equity-backed Stackpole International for C$800 million (U.S. $608 million).
Stackpole, headquartered in Ontario, Canada, supplies transmission and engine oil pumps and powder metal components for automotive powertrains. Two private equity firms are selling the business New York-based Crestview Partners, and Beijing-based Citic Capital Partners.
Dealmakers have been expecting M&A activity in the energy and midstream sectors because of the volatility of the oil market, which has fluctuated roughly between around $49 to $100 since September. For predictions on M&A activity in the sector, look out for the next edition of Mergers & Acquisitions Mid-Market Pulse on Aug. 17. The Mid-Market Pulse is a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives and published in partnership with McGladrey LLP.
Hong Kong-based Johnson Electric provides electric motors and motion systems for the automotive, building automation, security, machines, aerospace, equipment, home technologies and power tools sectors, among others.
The buyer said it had been looking to add pumps and highly-engineered components, which it gains with the Stackpole deal.
“Acquiring Stackpole’s oil pump technology and powder metal enterprise is an excellent fit that will enable us to provide integrated motorized pump solutions to customers in a rapidly growing market segment within the automotive industry, says Patrick Wang, Johnson CEO.
UBS Investment Bank and Morgan Stanley & Co. LLC advised Stackpole, and Kirkland & Ellis LLP and Stikeman Elliott LLP provided legal counsel. Perella Weinberg Partners LP advised Johnson, and Latham & Watkins LLP and Blake Cassels & Graydon LLP were legal advisers.
For more on deals surrounding the energy sector, watch our video interview with Jones Day's Jeff Dinerstein, below.
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Corrected August 11, 2015 at 1:58PM: 4358439811001