3i Backs Buyout of Hilite International Inc.

17 May 2011

3i, an international investor focused on Private Equity, Infrastructure and Debt Management, and funds managed by 3i, today announced the signing of a definitive agreement to acquire a majority stake in Hilite International Inc., a global supplier of automotive products that enhance fuel efficiency, transmission operation and emissions control. 3i, which is fully underwriting the transaction, is acquiring the company from a consortium of investors. Terms of the sale agreement were not disclosed.

Hilite, headquartered in Cleveland, Ohio, operates 6 manufacturing plants across North America, Europe and Asia. The company operates in a high growth segment of the global automotive market - the manufacturing of hydraulic actuators and timing systems which improve fuel consumption and reduce emissions. Hilite’s products are used in the engines, transmissions and exhaust systems of passenger and commercial vehicles. Among Hilite’s key customers are blue chip automotive manufacturers Volkswagen, Daimler, General Motors, Chrysler and BMW. In 2010, Hilite generated revenues of $400 million.

Hilite's future growth will be driven by global trends in fuel efficiency and emissions reduction, 3i said. Hilite is well-positioned to benefit from these market developments due to its technological expertise and its highly differentiated product offering as an increasing number of vehicles will be equipped with products manufactured by the company.

Ken Hanau, Managing Partner 3i North America said: “Our investment in Hilite is a perfect example of how 3i taps the experience contained in our global network to help its portfolio companies grow internationally.”

Hilite’s product portfolio consists of three groups:
• Engine products, camphasers and variable valve timing devices (together “VVT”), which are placed in the cylinder head to increase the fuel efficiency by improving the combustion cycle of the engine.
• Transmission valves as part of the transmission mechatronic that control the shifting process in automatic transmissions, and 
• Emission products, components for the after treatment of diesel emissions in commercial vehicles and stationary diesel engine applications (“SCR” systems, Selective Catalytic Reduction) integrated in the exhaust pipe to help reducing NOx and improving fuel efficiency.

Ulf von Haacke, Partner and Managing Director 3i Germany said: “Hilite is at the cutting edge of fuel efficiency and emissions controls technology, and is well-positioned to benefit from these global trends.”

In addition to Hilite International, 3i counts among its affiliated portfolio companies a number of other automotive and industrial businesses, such as Trescal, MoldMasters and Stork Materials Technology. The firm makes private equity investments growing middle-market companies which can benefit from access to 3i’s international network and deep sector expertise.

Lazard acted as financial advisor to Hilite in the transaction, while Houlihan acted as financial advisor to 3i. The transaction is subject to competition approval which is expected in the coming months.

For further information please contact:

3i contact – Great Britain
Isabel Unsworth
Tel.:  +44 207 975 3190
E-mail: isabel.unsworth@3i.com

3i contact – North America
Charlyn Lusk
Tel.:  + 1 646 502 3549 
E-mail: clusk@stantonprm.com

About 3i
3i is an international investor focused on Private Equity, Infrastructure and Debt Management, investing in Europe, Asia and the Americas. Our competitive advantage comes from our international network and the strength and breadth of our business relationships. These underpin the value that we deliver to our portfolio, shareholders and fund investors. 
http://www.3i.com

About Hilite
Hilite manufactures hydraulic drives and timing systems for the automotive industry. The products are used in engines, transmissions and exhaust systems for passenger cars and commercial vehicles. Hilite manufactures progressive powertrain products and emission systems that help to improve fuel consumption and to reduce emissions. Its customers include leading international car and truck manufacturers. With development and production sites in Europe, North America and Asia, Hilite offers its know-how and its experience as a reliable and competent partner to OEMs and Tier-1 customers across the globe.
www.hilite.com