Henniges Automotive Inc. has an interesting ownership history that just got a bit more intriguing. The supplier of automotive sealing systems and anti-vibration components has had two different private equity owners since being formed in late 2007, and now it has been purchased by a joint venture of a state-owned Chinese firm and a third PE investor.
Yet with this turnover, Henniges seems to have thrived.
Henniges Automotive was formed by the combination of two competitors. Wynnchurch Capital bought the North American operations of Metzeler Automotive Profile Systems S.A. and a few months later acquired what it deemed the “most promising assets” of GDX Automotive, which at one time had been under the GenCorp Inc. banner.
Wynnchurch combined the entities under the Henniges Automotive name, derived from the GDX brand that came from a firm founded in Germany by Ernst Henniges in 1951. Wynnchurch said Metzeler North America had strong operating and management systems, but was facing declining revenues. GDX, however, had a good book of business but lacked management systems.
In a case study the equity firm wrote, it said it rolled out best practices across the entire organization, but most important was putting the right leadership team in place. That led to a rise in sales and earnings and, in late 2010, a successful sale to Littlejohn & Co. L.L.C., its second private equity owner.
For its part, Littlejohn continued the path into making Henniges a true power in its field with a global footprint to match. During its ownership, Henniges completed an add-on acquisition, launched new production facilities in China and Mexico, took full ownership of a JV in China and signed a number of strategic alliances. Revenues grew 35 percent from 2011 to 2014, checking in last year at $824.8 million. And sales in China more than tripled to $150 million.
Littlejohn was able to cash in its investment with the $600 million deal to sell Henniges to a JV between state-owned Aviation Industry Corp. of China and investment firm BHR.
AVIC gives Henniges more access to the domestic Chinese auto market, while Henniges beefs up AVIC's automotive holdings. The company's management team and staff are expected to stay in place, with the new owners likely seeing a strong track record of success.
Henniges has come a long way since Wynnchurch started the transformation of two diamonds in the rough.