Onex and CPPIB selling Gates Corp. for $5.4 billion to Blackstone

TORONTO – Onex Corp. (TSX:OCX) and Canada Pension Plan Investment Board has signed a deal to sell Gates Corp. to private equity firm Blackstone for US$5.4 billion.

Gates is a manufacturer of power transmission belts as well as hydraulic and industrial hoses and couplings.

Onex says proceeds from the sale to the Onex Group, including its co-investors, will be approximately $2 billion, of which Onex Corp.’s share will be approximately $550 million.

CPPIB’s proceeds from the sale of Gates will be approximately $1.5 billion.

Gates is a division of Tomkins, a maker of belts and hoses for the industrial and automotive markets, that Onex and CPPIB jointly acquired in 2010 for roughly $5 billion.

Onex says including the sale of Gates, they will have successfully sold eight divisions of Tomkins for $7.9 billion in aggregate proceeds.