BY Richard Summerfield
Brookfield Business Partners has agreed to acquire DexKo Global Inc, a maker of recreational vehicle components, from private equity firm KPS Capital Partners LP in a $3.4bn deal.
Brookfield Business Partners, a subsidiary of Brookfield Asset Management, said the deal would be funded with about $1.1bn of equity, of which Brookfield intends to invest approximately $400m. The balance of the equity investment will be funded by institutional partners. The transaction is expected to close by the end of the year.
Michigan-based DexKo manufactures highly engineered components for recreational vehicles, trailers and towable equipment providers. The company employs more than 6000 people across 50 production facilities.
“We are pleased to grow our industrials operations with the acquisition of DexKo, a market leader known for quality and reliability,” said Mark Weinberg, managing partner of Brookfield Business Partners. “DexKo’s world-class management team has delivered consistently strong performance and we are excited to partner with them to further build on an established track record of value creation.”
“DexKo exemplifies the KPS investment strategy of seeing value where others do not, buying right and making businesses better, across decades, economic and business cycles, geographies and industries,” said Raquel Palmer, co-managing partner of KPS. “We are proud of DexKo’s extraordinary transformation under our ownership. DexKo demonstrates our ability to partner with world-class management teams to build industry-leading manufacturing companies on a global basis.”
“Our partnership with KPS has been extraordinary,” said Fred Bentley, chief executive of DexKo. “KPS recognized DexKo’s strength and potential from the start and invested to support DexKo’s growth ambitions. DexKo has become a better business as a result of KPS’ investments in our operations and people.
“DexKo is well positioned for future growth which we look forward to pursuing in partnership with Brookfield,” he added.
The deal is the latest addition to Brookfield’s portfolio of industrials, infrastructure and business services. The company says it has $600bn in assets under management with $22bn invested in the industrials sector alone.
Financing for the deal will be led by a syndicate of banks including Credit Suisse, Deutsche Bank, BMO Capital Markets, Bank of America, Goldman Sachs and RBC Capital Markets. Davis Polk & Wardwell LLP is acting as legal adviser to Brookfield.
News: Brookfield to buy recreational vehicle parts maker DexKo Global for $3.4 billion