Pamplona Capital Buys TMD Friction

(Reuters) – TMD Friction, a bankrupt German maker of brake pads for the auto industry, has been bought by private equity firm Pamplona Capital Management, TMD said on Friday.

Both sides declined to comment on the sale price. The acquisition will safeguard 3,800 jobs worldwide, TMD said.

“I’m delighted to be partnering with Pamplona who are highly supportive of TMD Friction and the long-term outlook for the group,” TMD Friction Chief Executive Derek Whitworth said.

TMD Friction declared insolvency at its four main plants in December, after reporting a collapse in orders and a lack of credit.

Pamplona will take a majority stake in the firm alongside TMD’s management, TMD said.

Montagu Private Equity [MONTGF.UL] acquired the group in a 776 million euro ($1.04 billion) leveraged buyout in 2001.

This stake was taken on by a group of hedge funds after a restructuring in 2006, which saw the company’s debts cut to 215 million euros. The company is now free of debt.

“I’m happy to be leaving behind a group of people who saw us more of a financial instrument,” said TMD’s Whitworth on Friday.

“We are relieved to be owned by someone that wants to own a company that makes brake pads,” he added.

The Leverkusen-based group generated 2007 sales of 690 million euros.

(Reporting by Tom Freke; Editing by Erica Billingham) ($1=.7493 Euro)