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Blackstone goes it along with $5.5bn-plus Gates offer after partner TPG backs out

27 Mar 2014

exit 15_sqGlobal buyout giant Blackstone has reportedly emerged as the frontrunner to buy diversified industrial company Gates Global from its private equity owners for more than $5.5bn.

The buyout house is in the final stages of negotiations with owners Onex and the Canada Pension Plan Investment Board according to Reuters, which cited people familiar with the matter.

They said fellow private equity major TPG Capital had pulled out of a joint $5.4bn bid with Blackstone, but the latter decided it would go ahead alone with an offer.

The final price including debt is expected to be between $5.5bn and $6bn, Reuters added.

Gates, formerly known as Tomkins, was taken private by Onex and CPPIB in 2010CPPIB then bought of the company’s air distribution division for $1.1bn in September 2012.

Last year the pair were said to be talks with investment banks to advise them on a sale, potentially considering an IPO.

Colorado-headquartered Gates employs more than 14,000 people across 106 locations in 30 countries.

The company had an annualised EBITDA of $536m at the end of September with net debts of $1.5bn.

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