Canada Pension Plan Investment Board, Toronto, and buyout firm Onex agreed to buy Tomkins for £2.89 billion ($4.5 billion) to add to their investments spanning hybrid cars and vehicle assembly.
Shareholders of the British maker of transmissions and bathtubs will receive 325 pence a share in cash, the two companies said Tuesday in a statement. The bid is about 41% higher than Tomkins' closing price on July 16, the day prior to the announcement of a potential takeover.
Tomkins is the latest European manufacturer to be targeted as buyout firms and cash-wielding global engineering companies seek to invest in new markets and products. Emerson Electric Co. agreed to pay $1.5 billion for Chloride Group PLC, a British maker of backup power systems that had attracted a rival bid from ABB of Switzerland. Safran SA is seeking to buy Zodiac Aerospace SA.
The C$127.6 billion (US$123.4 billion) CPPIB and Onex said that, given the global economic struggles, their aim is to build value over a long-investment horizon.
The offer “fairly reflects both the value of the group today and its future potential,” Tomkins Chairman David Newlands said in a statement.
Onex and its partner, through their investment vehicle Pinafore Acquisitions, are being advised by Citigroup bankers Philip Robert-Tissot and Grant Kernaghan. J.P. Morgan Cazenove's Edmund Byers, Barry Weir and Patrick Magee advised Tomkins.