“I hear you say "Why?" Always "Why?" You see things; and you say "Why?" But I dream things that never were; and I say "Why not?"

 

- “Back to Methuselah” by George Bernard Shaw

 

After more than a year on the road, BHR and its strategic partner, AVIC Auto, a subsidiary of Aviation Industry Corporation of China, found themselves in Auburn Hills, Michigan on September 8, 2015 toasting their acquisition of Henniges Automotive, the world’s leading designer and manufacturer of sealing and anti-vibration solutions servicing longstanding OEM clients including General Motors, Ford, BMW, Volkswagen, Daimler and Chrysler as well as top Chinese automakers including Beijing Automotive Industry Corporation.  The transaction is valued at approximately US$600 million with each of AVIC Auto and BHR holding 51% and 49% of Henniges post-acquisition. 

 

BHR, with offices in Beijing, Shanghai, Hong Kong and New York, is a Sino-U.S. investment firm engaged in cross border investments, SOE reform investments and alternative investments.  BHR is supported by its stakeholders including the Bank of China, Bohai Industrial Investment Fund (among the first RMB private equity funds approved by State Council), Shanghai Ample Harvest (subsidiary of Shanghai Harvest Fund), RSB, LLC (a U.S.-based investment fund) and Thornton Group LLC (a U.S.-based financial advisory firm). 

 

The decision by its exiting shareholders, Littlejohn & Co, to sell Henniges to the consortium of AVIC Auto, China’s number one automotive parts manufacturer, and BHR makes perfect sense.  The marriage of Henniges’ customer base, innovative technology, geographic penetration to AVIC Auto’s industrial solutions, economies of scale, market access and BHR’s financial resources will further bolster Henniges’ global footprint and overall growth and enable Henniges to better compete against competitors in the face of the industry’s trend of consolidation.   

 

Henniges, which currently operates fifteen manufacturing plants and five engineering and technical centers in 6 countries with full designing, testing, prototyping and manufacturing capabilities, and 2014 sales in the neighborhood of US$820 million, has long been courted by automotive companies.  Though its attractions are manifold, in assessing this investment, BHR remained constantly guided by its philosophy of rational valuation, potential for organic growth and potential for synergy with industrial partner.  Aside from its robust financials and blue-chip clientele base, BHR was also taken by the leadership abilities of Henniges’ management team and their track record of innovation and international expansion.  Furthermore, with AVIC Auto at the helm, BHR is confident that Henniges, with four existing facilities in China, is strategically positioned to further expand its market presence by offering the growing population of drivers in China, and in the world, an enhanced driving experience with its products.

 

The BHR team worked tirelessly over a year to bring the acquisition to fruition and demonstrated their outstanding capabilities to navigate the complexities of the transaction, which in addition to the acquisition itself, were the added complexities of optimally structuring the private equity portion of the investment.  According to BHR CEO Jonathan Li, who, early on in the bidding stages, set the tone of this acquisition as a “must-have deal” explains, “[f]or BHR, this transaction illustrates our ideal investment, with AVIC Auto as our industrial partner and Henniges as our investment target, and the successful closing highlights BHR’s capabilities and core strengths as the go-to partner for Chinese industrials seeking to expand overseas - our sense of innovation coupled with our experienced cross-border team were invaluable in getting the Henniges deal to the finishing line”. 

 

With the closing of the Henniges acquisition, BHR’s cross-border platform, based on past integration successes, experienced cross-border team, global network and operational excellence seeks to continue identifying unique acquisition targets and implementing complementary acquisitions which both maximise return for its investors at minimal risk and assist industrial partners to expand their geographic penetration, scale and technology.

BHR Acquires Henniges Automotive

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