Haitong Securities Co., China’s second-largest brokerage by market value, agreed to buy Shanghai-based leasing company UniTrust Finance & Leasing Corp. from U.S. private-equity firm TPG Capital for $715 million.
Haitong will pay cash to acquire 100 percent of UniTrust parent UT Capital Group Co., the firm said in a filing to the Shanghai stock exchange yesterday.
UniTrust provides financial leasing services to more than 3,000 customers in China in industries including health care, education, printing, textiles, machine tools, and electronics, TPG said in a separate statement. The acquisition will help Haitong expand financial services and cross-sell products to its customers.
TPG first invested in the business in 2008, paying $103 million for a 50 percent stake. It started an auction of UT Capital this April and sought about $800 million for the company, according to two people familiar with the matter, who asked not to be identified as the matter is private.
Haitong can take advantage of lower interest rates to fund equipment rentals for less than TPG could, one of the people said. The securities firm plans to offer debt backed by the leasing business’s receivables, the person said.
Haitong shares declined 1.7 percent in Shanghai to close at 12.16 yuan. The Shanghai Composite Index fell 1.9 percent.
UT Capital’s total assets increased to 10.5 billion yuan ($1.72 billion) in 2012, from 4.4 billion yuan in 2010, TPG said in its statement yesterday. The company’s net income was 199 million yuan in the first half of 2013, TPG said.
Morgan Stanley and UBS AG advised TPG. Credit Suisse Group AG provided guidance to Haitong.