Morgan Stanley Private Equity Asia has completed its $100 minority stake purchase of China XD Plastics, the Nasdaq-listed producer of automotive plastics.
The company, which develops, manufactures, and sells modified plastics, primarily for automotive applications, is one of the largest modified plastics manufacturers in the country. Its products are used in more than 70 automobile brands manufactured in China, including Audi, BMW and Toyota.
Revenues for the second quarter were reported this week at $88.2m, an increase of 42.2 per cent from same period last year.
The transaction will be tendered using redeemable convertible preferred shares priced at $6.25 each.
“MSPEA has a disciplined strategy of investing in market-leading businesses with high-quality management teams and compelling competitive advantages,” said Ed Huang, a managing director at MSPEA.
“We see the automotive modified plastics market in China as having attractive long-term growth prospects and China XD Plastics as having established itself as a strong and leading player in this space.
“We are impressed by the company’s product development and production management capabilities as well as its experienced management team,” he added.
Jie Han, chairman and CEO of China XD, said, “We are very pleased to have completed this transaction with MSPEA and to have such a highly respected long-term partner supporting us as we pursue our strategic and financial goals.
“We look forward to working closely with MSPEA to further strengthen our position as an industry leader and deliver value for our shareholders,” he added.
Following the deal, Morgan Stanley will designate two of its members to be elected to China XD’s board of directors.
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