Private equity firm Olympus Capital will invest $100 million for an undisclosed minority stake in Zhongwang International Group.
Liaoning Zhongwang Group, a subsidiary of Zhongwang International Group, is an aluminium manufacturer as well as a supplier of light transportation material in China. It supplies to the railway, shipping and aviation industries. With its investment Olympus Capital has secured the right to appoint one director to the nine-member strong board of China Zhongwang Holdings. Assuming Olympus has negotiated board representation in proportion to its stake, Olympus will have acquired at least 10% equity interest in Zhongwang.
Zhongwang started business in 1993 and has grown to become the third largest aluminium extrusion profile manufacturer in the world. In 2007 it had sales of over Rmb10 billion ($1.5 billion).
Olympus says its plans to add value to Zhongwang including helping ôthe company to explore new markets, both domestic and international, as well as vertical integration opportunities and to continue to improve corporate governance as the company makes a transition from a private enterprise to one with international investorsö.
Olympus Capital is a middle-market private equity firm with an Asia focus and offices in Hong Kong, Shanghai, Tokyo, New Delhi, Seoul and New York. Its investor base includes institutions and high-net-worth families from North America, Asia, Europe and the Middle East. Since it started business in 1997, Olympus Capital has invested approximately $1.3 billion in 30 portfolio companies in the region.
Olympus CapitalÆs prior investments in China include: Sichuan Emeishan Special Cement, a joint venture cement producer with Sichuan Golden Summit (Group) Joint Stock Co; China Minzhong, a processed vegetable exporter based in Fujian province; and Tamarisk, a specialty vehicle holding carbon credits from the reduction of emissions at certain chemical plants.
Olympus used an unnamed boutique adviser to assist on the deal while Zhongwang did not have an adviser.
OlympusÆs investment comes in the same week that CLSA Capital Partners invested $30 million in convertible bonds issued by TaiwanÆs Fulltech Fiber Glass Corporation. Fulltech is a fibreglass yarn manufacturer serving both electronic and industrial customers.
The deals confirm that for smaller, non-control private equity deals, Asia and particularly Greater China, continues to be a vibrant market.