Hong Kong firm acquires majority stake in supplier Key Safety Systems

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DETROIT -- Hong Kong private equity firm FountainVest Partners completed a deal to become the majority shareholder in automotive safety products supplier Key Safety Systems Inc.

The deal could be worth as much as $800 million, a Bloomberg report out of China said in April.

Existing owners New York hedge fund Crestview Partners LP and certain KSS management will retain shares in the company, KSS said a statement today

Canada Pension Plan Investment Board, which manages $226 billion in assets for 18 million Canadians, co-invested with FountainVest on the deal.

It’s unclear how many shares FountainVest acquired from the existing shareholders.

A KSS official was not immediately available to comment.

“We see excellent growth prospects for KSS in both the rapidly expanding Chinese market and the broader global market as customers seek to improve the safety of their cars,” Frank Tang, co-founder and CEO of FountainVest, said in a press release.

Goldman Sachs & Co. and UBS Investment Bank acted as advisors to KSS.

The deal marks FountainVest’s first investment in the U.S.

It currently manages about $2.4 billion of assets, mainly in Chinese companies, Bloomberg reported.

KSS, which produces a variety of components such as airbags, seat belts and steering wheels, employs 8,500 people worldwide and 250 in Southeast Michigan. Its products are used on about 300 vehicles by about 60 customers globally, KSS says on its website.

The company generated an estimated $1.2 billion in business with automakers globally in 2013 up from an estimated $1.0 billion in 2012, according to the Automotive News list of the top 100 suppliers in North America. 

Private equity firm Carlyle Group acquired the bankrupt assets of Lakeland, Fla.-based Breed Technologies Inc. to form Key Safety in 2003. Carlyle sold the company to Crestview Partners and KSS management in 2007.

You can reach Dustin Walsh at dwalsh@crain.com.


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