3i Group PLC completes investment in Formel D and introduces CITIC Capital as investment partner
3i Group plc (“3i”) today announces that it has completed its investment in Formel D, a global service provider to the automotive and component supply industry. Following the closing, 3i has introduced CITIC Capital China Partners III, L.P., a buyout fund managed by the private equity arm of CITIC Capital Holdings Limited (“CITIC Capital”) as an investment partner. CITIC has invested c€72m in the company and 3i’s investment is c€155m.
On 12 May 2017, 3i signed a definitive agreement to purchase Formel D from Deutsche Beteiligungs AG (DBAG) and DBAG Fund V. This transaction was subject to customary regulatory approvals, all of which have been granted. 3i intended to introduce a strategic partner post-closing with the view to supporting its investment strategy for Formel D. CITIC Capital is a strong partner with a broad network in China, which will help Formel D build its regional operations and further benefit from the anticipated market growth in Asia.
Ulf von Haacke, Partner & Head of Industrial at 3i, said: “We are delighted to welcome CITIC Capital as our investment partner in Formel D. Their insights into the Chinese automotive market will be invaluable as Formel D continues its growth in this market.”
Headquartered in Hong Kong, with offices in Shanghai, Beijing, Shenzhen, Tokyo and New York, CITIC Capital’s private equity arm leverages its extensive resources to help companies realise their full potential in Asia, and has completed over 50 investments over the past years in China, Japan, the US and Australia. The firm currently manages US$4.8 billion of committed capital.
Boon Chew, Senior Managing Director of CITIC Capital, commented: “The investment in Formel D is our first deal in Germany. We are happy to partner with the renowned investor 3i and are looking forward to jointly supporting the successful growth of Formel D. We are committed to adding significant value to the company’s development, in particular by using our expertise and network in Asia.”
Formel D has a strong track record and has outperformed the market over the last 10 years. Growing at an average of 17% p.a., Formel D differentiates itself through its global scale, premium customer relationships and comprehensive service offering: it is the only player offering quality services along the entire automotive value chain. 3i and CITIC Capital plan to support Formel D’s international growth by rolling out its existing services to clients in other geographies, expanding its client base in Asia, and increasing its higher “value add” services such as vehicle test specification and virtual testing.
Dr. Juergen Laakmann and Dr. Holger Jené, Managing Directors of Formel D, added: “We are excited to work with 3i and CITIC Capital. Formel D’s international success story has just begun and we feel the combination of 3i and CITIC Capital is an exceptional one to further drive the next phase of our growth.”
Baird served as financial advisor and Willkie Farr & Gallagher LLP served as legal counsel to 3i. Harris Williams & Co. served as financial advisor and Shearman & Sterling LLP served as legal counsel to CITIC Capital.