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Onex sells Tomkins division to Madison Dearborn

The firm has sold a business line of UK engineering company Tomkins, the largest private equity buyout of 2010 at $4.7bn, to Madison Dearborn Partners for $505m.

Onex Corporation has agreed to sell Tomkins division Schrader International to Madison Dearborn Partners for $505 million.

Northern Ireland-based Schrader, which manufactures tire pressure monitoring systems and other auto accessories, had fiscal year 2011 revenue of approximately $451 million and adjusted earnings before interest, tax, depreciation and amoritisation of $76 million. The sale is expected to close during the second quarter of 2012.

US federal law has required all automobiles to have tire pressure monitoring systems since September 2007. Cars in the European Union are required to have the pressure monitoring systems by 2014, with similar requirements expected in other regions in the future.

“We look forward to completing the investment and working with Schrader’s management team to capitalise on what we believe are numerous and attractive growth opportunities, including those driven by legislative requirements,” a spokesperson for Madison Dearborn told Private Equity International.

Onex Partners, the main private equity platform within the publicly listed asset management firm, took UK engineering company Tomkins private alongside the Canada Pension Plan Investment Board in 2010 for $4.7 billion – the largest buyout of the year. Onex purchased Tomkins using capital from its third private equity fund that closed on $4.3 billion in 2009.

Onex was not available for comment at press time.

Madison Dearborn is investing in Schrader from its sixth fund that closed on $4.1 billion in May 2010.

Last October, Onex raised C$800 million (€573 million; $767 million) for its third mid-market buyout fund, ONCAP III. Onex was the largest investor in the fund, committing C$280 million, with another C$520 million coming from third-party investors.

Onex manages private equity, real estate and credit securities investments, managing approximately C$14 billion, of which C$9 billion is third-party capital.

Madison Dearborn, which has completed investments in approximately 120 companies, has raised six funds with aggregate capital of over $18 billion.