Carlyle Group LP (CG), the second-biggest private-equity firm by assets, has agreed to sell Sequa Automotive Group to The Jordan Company in a deal valued at $400 million, according to two people with direct knowledge of the deal.
The Jordan Company, a private-equity firm with $5 billion of committed capital under management, will invest $125 million in the business, said the people, who asked to remain anonymous because the transaction hasn’t been announced. Barclays Plc (BARC) and RBC Capital Markets LLC are set to start syndication of a $275 million loan to fund the deal, they said.
Jordan is carving the automotive business out of industrial manufacturer Sequa Corp., which Washington-based Carlyle took private in 2007 in a deal valued at $2.7 billion. Carlyle sought to divest the auto unit, which makes airbag equipment for Ford Motor Co. (F) and General Motors Co. (GM), in order to focus on Sequa’s aerospace business and make the company more valuable in a potential public offering or strategic sale, said one of the people.
Randall Whitestone, a spokesman for Carlyle, declined to comment, as did Charlyn Lusk, a spokeswoman for Jordan at Stanton Public Relations & Marketing.
Sequa Automotive Group includes ARC Automotive, which makes airbag inflators, and Casco Products Corp., a supplier of cigarette lighters, power outlets and air-conditioning sensors, according to the company’s website.
Jordan, which was started in 1982 and has offices in New York, Chicago, Stamford and Shanghai, participates in deals worth $100 million to $2 billion, according to its website. The firm’s holdings include Haas Group International Inc., Kinetek Group Inc. and Venari Resources LLC.
With the deal, Jordan finished investing its Resolute Fund II, which raised $3.6 billion in 2008, said one of the people. The firm is expected to start marketing a third fund to prospective investors by next month with a similar target for commitments, the person said.
Carlyle put $1.01 billion of investor money into the 2007 buyout of Sequa, according to fund marketing documents viewed by Bloomberg News, acquiring Sequa’s outstanding stock for $175 a share. That equity value was marked at $1.11 billion, or 1.1 times invested capital, as of Dec. 31, the documents show.
Carlyle, founded in 1987, initially focused its buyout investments in aerospace and defense. It now invests in industries including real estate, health care, energy, consumer and retail, telecommunications and financial services.
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