UPDATE 2-Onex, CPPIB to sell Gates Corp to Blackstone for $5.4 bln

Fri Apr 4, 2014 6:28pm EDT
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(Adds financial, legal advisers on the deal)

April 4 (Reuters) - Canadian private equity firm Onex Corp and Canada Pension Plan Investment Board (CPPIB) said they would sell industrial conglomerate Gates Corp to private equity firm Blackstone Group LP for $5.4 billion.

Auto parts and building products maker Gates is a division of Tomkins, which Onex and CPPIB jointly bought in 2010 for about $5 billion.

The sale is expected to close later this year, the companies said on Friday.

Proceeds from the sale to the Onex Group, including co-investors, would be about $2.0 billion, of which Onex Corp's share would be about $550 million, including carried interest. CPPIB's share would be about $1.5 billion.

Reuters reported last week that Blackstone was close to a deal to buy Gates.

Denver, Colorado-based Gates, which filed for an IPO in December, sells products ranging from power transmission systems to acrylic bathtubs in more than 120 countries.

Gates generated $2.9 billion in sales and $536 million in adjusted earnings before interest, taxes, depreciation and amortization in the year ended Sept. 28, according to a regulatory filing.

Onex said in March it would sell The Warranty Group, a provider of extended warranty contracts, to an affiliate of TPG Capital Management LP for an enterprise value of about $1.5 billion.   Continued...