(Reuters) - Canadian private equity company Onex Corp OCX.TO said it will buy German plastics machinery maker KraussMaffei AG for 568 million euros ($736.3 million).
KraussMaffei is the first European-based investment for Onex Partners III, Onex's $4.7 billion private equity fund.
Onex Partners III will make an equity investment of about $340 million, of which Onex's share is about $86 million as a limited partner in the fund.
Munich-based KraussMaffei, which has manufacturing plants in Germany, Switzerland, Slovakia and China, generated revenue of about 1.0 billion euros for the twelve months ended June 30.
Sources close to the transaction told Reuters on Tuesday the deal was about to be signed, but declined to give financial details.
A Chinese machinery group had also expressed interest in KraussMaffei Technologies, which is owned by private equity group Madison Capital MDCp.V.
KraussMaffei Technologies has common roots with defense group Krauss-Maffei Wegmann but today is an independent company.
The deal is expected to close by March 2013, Onex said on Wednesday.
Onex said earlier this month it would acquire Kentucky-based SGS International Inc, a graphics servicing provider to the packaging industry, for $813 million.
Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Joyjeet Das and Supriya Kurane