Crestview sealed a $1.4 billion deal with Hitachi to sell its 4-years-old subsidiary, JR Automation

Crestview sealed a $1.4 billion deal with Hitachi to sell its 4-years-old subsidiary, JR Automation
  • Crestview Partners considered JR Automation's IPO before selling it to Hitachi for $1.4 billion.
  • Crestview Partners tripled JR Automation's sales to $600 million in four year.
  • JR Automation currently has 23 plants across Asia, Europe, and North America.
  • Crestview has already started marketing for its fourth flagship & have collected around $1.88 billion.

As per the sources, selling JR Automation wasn’t the primary plan for Crestview Partners. Prior to it, the private equity firm had explored the option of taking the JR Automation public. Previously, the firm had also negotiated with bankers to put its plans of JR Automation’s initial public offering (IPO) in action. The sources also added that the inbound interested that the company received on JR was substantial. Crestview has owned JR Automation for around four years.

Crestview Had Considered JR Automation’s IPO Before Closing The Deal With Hitachi

According to the experts, Dual track processes have been getting commoner than ever before. It is a process that sees a seller simultaneously pursuing an IPO as well as a sale. Owing to the massive interest, however, Crestview decided in favor of opting for a sale first; a strategy that impeccably worked for Crestview as Hitachi announced on Friday that it’ll be signing a deal valued at $1.425 billion to purchase the Michigan based company.

As per the specifics of Crestview’s deal with Hitachi, the private equity firm has made as much as 7.5 times the money that it had originally invested in JR Automation.

Since 1980, JR Automation has served its valuable customers in construction, consumer products, and automotive industries with its automated manufacturing systems. The company is known to help its clients that are stuck with manufacturing problems. JR Automation currently employees 2000 professionals while it also makes extensive use of robotics to provide solutions.

In a statement, Hitachi’s executive vice president, Masakazu Aoki, was reported quoting:

“With JR Automation’s robotic system integration capabilities, combined with Hitachi’s digital solutions and technologies, we can provide customers with new, unparalleled value by connecting the whole process.”

Crestview Tripled JR Automation’s Sales In Four Years

Crestview had made an investment into JR Automation around four years ago in March 2015. According to PitchBook, following the purchase, JR Automation has seen its sales skyrocket from $170 million to more than $600 million that marks three times its sales prior to Crestview’s buyout.

Currently, the company has 23 plants in various locations in Asia, Europe, and North America. Before 2015, the total number of plants JR Automation had was five.  

Crestview’s primary focus has always been on financial services and industrial sector. The firm had used its 3rd fund to make the sizeable investment in JR Automation. In 2015, the fund had closed on $3.2 billion.  

Marketing for the private equity firm’s fourth flagship has already started. For its 4th fund, the company has already collected around $1.88 billion. As per January 2018’s report, the buyout shop has the potential to raise $3.5 billion in funds for the pool.

JR Automation spokesperson is yet to comment on the news.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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