KPS Capital Partners Buys Bosch Foundation Brakes

KPS Capital Partners announced Tuesday that it has acquired The Bosch Group’s automotive foundation brakes business: Bosch Foundation Brakes. Terms of the deal were not released. Bosch Foundation Brakes is based in France and makes automotive foundation brakes and foundation brake components.

PRESS RELEASE

KPS Capital Partners, LP (“KPS”) announced today that it has entered into definitive agreements to acquire The Bosch Group’s automotive foundation brakes business (“Bosch Foundation Brakes” or the “Company”) through a newly-formed affiliate. Financial terms of the transaction were not disclosed.

Bosch Foundation Brakes, headquartered in Drancy, France, is one of the world’s largest manufacturers of automotive foundation brakes and foundation brake components. The Company’s primary products, which include brake calipers, disk brakes, drum brakes, and parking brakes, are sold directly to original equipment manufacturers and through various aftermarket channels. In 2010, Bosch Foundation Brakes generated €850 million ($1.1 billion) in total sales volume. The Company employs 5,200 associates at twenty locations, of which fifteen are manufacturing facilities, in Europe, Asia, and South America.

Michael Psaros, a KPS Managing Partner, said, “KPS is very excited to create one of the leading manufacturers of foundation brakes, building on our many years of experience investing in the automotive industry. The Company will launch with a technologically advanced product offering and a leading reputation for quality, durability, delivery, and customer support and product innovation. The Company is ideally positioned to benefit from the world’s fastest-growing markets. In addition, the combination of the Company’s customer relationships and knowledge base of its thousands of associates worldwide, together with the financial resources provided by KPS, will accelerate the Company’s growth as an independent enterprise.”

Mr. Bernd Bohr, member of the Bosch board of management and chairman of Bosch’s Automotive Group, said, “In selling our foundation brakes business to KPS, we have chosen a leading private equity firm with many years of experience in the industrial sector.”

Ms. Martina Merz, Chief Executive Officer of the Foundation Brakes Business, said, “Our objective is to build a leading supplier of foundation brakes and I believe that the Company’s strong balance sheet and access to KPS’s financial resources will enable it to achieve that objective. I am very confident that by tailoring the business processes to foundation-related requirements and by continuing to leverage the skill, creativity and talent of our associates, the new Company will achieve its full potential.”

Completion of the transaction is expected in the first quarter of 2012 and is subject to customary closing conditions.

Lazard Frères & Co. LLC acted as financial advisor and Hengeler Mueller as legal counsel to KPS and its affiliates.

About KPS Capital Partners, LP
KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $2.7 billion of assets under management focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company’s liabilities.