HSBC Private Equity has arranged EURO125 million acquisition financing in support of TMD Friction’s acquisition of the automotive friction branch of RuTGERS Automotive AG. TMD Friction, based in Leverkusen, Germany, manufactures friction materials used in braking systems for the automotive sector. The deal was financed with a mixture of debt, provided by JP Morgan Partners, and equity provided by an HSBC Private Equity-led syndicate of investors. This is the same syndicate responsible for the EURO776 million management buyout of the company from BBA Group in August 2000. HSBC Private Equity is the majority shareholder in TMD Friction.
TMD Friction produces products including disc brake pads and drum brake linings for passenger and commercial vehicles, under the brand names Textar, Mintex and Don. The acquired division of RuTGERS mainly operates out of Essen, Germany and has been part of the company since 1964. Trading under the brand names PAGID and COSID in Europe and COBREQ in South America, the automotive and industrial friction businesses generated revenues of EURO175 million last year. Customers include DaimlerChrysler, General Motors and Volkswagen. RuTGERS is selling the division in order to focus on other elements of its chemicals and plastics business.
Together the two businesses will have revenues of approximately EURO650 million. The acquisition will add three manufacturing plants and nearly 2,000 staff to TMD Friction’s existing 3,600 staff and13 facilities in the US, Europe and China. The acquisition gives TMD Friction access to complementary technologies and the company aims to consolidate it’s European market position and establish a global presence.
The CEO of TMD Friction, Dr Erich Bauer, said: “Based on our leading position in Europe, we have now achieved the critical mass to support an expansion programme in North and South America and the Far East, supported by an innovative R&D function. In Europe we will strengthen our after market position, as we will have access to additional production capacities, thus providing an improved availability and range to our customers.”