Gimv, Capricorn others agree sale of Punch Powertrain to China’s Yinyi: Reuters

Belgian holding company Gimv (GIMV.BR) said on Thursday that it and other shareholders had agreed to sell automotive system supplier Punch Powertrain to Chinese group Yinyi.

Co-investor Capricorn, which also sold its Punch stake, said Punch Powertrain was sold for around 1 billion euros ($1.1 billion), including debt.

A person familiar with the deal said this represented about 16 times Punch’s 2015 core profit (EBITDA), although the Belgian company was aiming to almost double that profit figure this year, which would give a multiple of closer to nine.

Rothschild [ROT.UL] had been hired in the autumn to find a buyer and was expected to offer Punch to Chinese carmakers and suppliers seeking access to technology.

Earlier this month, Yinyi agreed to buy another automotive asset, air bag inflator ARC Group. Yinyi said the new purchase would diversify its activities and make it a top auto supplier.

Yinyi may list Punch on the stock exchange in China in the medium term, the person familiar with the matter said.

Gimv said in a statement the deal, which is still subject to a number of financial and regulatory conditions, could boost its equity value by 7 percent.

Gimv and its Gimv-XL fund had a joint stake of 32 percent. Buyout groups New Horizon, LRM and Capricorn also had interests.

Punch employs about 1,200 people and is practically debt-free, and has plans to expand its plants in China and Europe.

Punch chief executive Cor van Otterloo said that, with Gimv and other shareholders, the company had diversified its customers and products and now planned further geographic expansion, within and outside Asia.

Power trains transmit the drive from the engine to the axle. Punch makes so-called continuously variable transmissions (CVTs), which are common in Asia.

The former CEO of Beijing Automotive Group [BEJINS.UL], Dazong Wang, which has set up Chinese investment banking boutique Ophoenix, advised Yinyi on the deal.

While Rothschild had done some market sounding for the asset, an actual sales process had not started yet.

($1 = 0.8973 euros)

(Reporting by Philip Blenkinsop in Brussels and Arno Schuetze in Frankfurt; Editing by Mark Potter)