A consortium that includes private equity firms Blackstone Group and TPG plans to offer US$5.5 billion to acquire auto supply firm Gates Global Inc, a person familiar with the matter said on Monday.
The deal would be one of the largest private equity transactions so far this year, after Cerberus Capital last week announced the US$9.1 billion purchase of supermarket Safeway.
Gates Global is a leading producer of power transmission belts and fluid power products for the automobile and other industries.
The company garnered US$2.9 billion in sales and US$25 million in profits in the year ended Sept. 28 last year, according to a US securities filing.
In December last year, Gates filed papers for an initial public offering (IPO).
Gates is controlled by Canadian private equity company Onex and the Canada Pension Plan Investment Board.
The Canada Pension Plan Investment Board is weighing keeping an ownership stake in Gates, the Wall Street Journal reported on Monday.
Gates last changed hands in 2010, when Onex and Canada Pension acquired the assets as part of the purchase of UK engineering and manufacturing group Tomkins for about US$5 billion.
Gates is based in Denver and has 14,300 employees.
In related news, private equity group Permira is looking to float Japanese agricultural chemicals company Arysta LifeScience on the New York Stock Exchange, the Financial Times reported, quoting people familiar with the situation.
While a sale to a trade buyer is also a possibility, London-based Permira is in talks with banks to discuss an IPO, valuing Arysta at US$4 billion including debt, the newspaper said.
Permira bought Arysta, which manufactures insecticides and veterinary medicines, in 2008 for 1.95 billion euros (US$1.32 billion).
Arysta is considering whether to move its domicile from Japan to the US or a country with lower corporate tax rates, people familiar with the matter were quoted as saying by the FT.
A sale is widely expected to attract institutional investors and trade buyers, including China’s Sinochem (中國中化) and Nufarm of Australia.