Chicago equity firm buying TPMS-maker Schrader Intl.

ERJ staff report (TB)

Chicago, Illinois -- An affiliate of Chicago-based private equity firm Madison Dearborn Partners L.L.C. has agreed to buy the Schrader International tyre valve and associated products business of Pinafore Holdings B.V. for about $505 million.

The Schrader division manufactures tyre pressure monitoring systems (TPMS), valve products and tyre hardware and related accessories for both OE and aftermarket customers, according to Pinafore Holdings, formerly known as Tomkins P.L.C.

The Schrader division had fiscal year 2011 sales of about $451 million and adjusted pre-tax operating income of about $76 million. Schader generates nearly two-thirds of its annual revenue from sales in North America, according to Pinafore.

The closing of the transaction is subject to customary conditions and is expected to occur in the second quarter of 2012, Pinafore said.

The transaction is being carried out by August Lux Holding Co., an affiliate of Madison Dearborn, which describes itself as having six funds with aggregate capital of more than $18 billion and as having invested in approximately 120 companies since its formation in 1992.

Northern Ireland-based Schrader has 15 industrial locations worldwide. The US headquarters are in Denver.

Schrader was founded in 1844 as a machine shop by August Schrader I. In the 1890s he and his son Georg invented the pneumatic tyre valve, the basic design of which is still used today.

Schrader claims more than half of global vehicle platforms use Schrader direct TPMS technology.

Madison Dearborn describes its objective as investing in companies “in partnership with outstanding management teams to achieve significant long-term appreciation in equity value.”

From Tire Business (A Crain publication)

Press release from Onex