Switzerland's SFS Group has agreed to buy Singapore disc drive component maker Unisteel Technology International from private equity fund KKR & Co L.P. (KKR.N) for an undisclosed sum, the companies said in a joint statement on Monday.
The deal marks KKR's first full exit from an asset in its first pan-Asia fund, according to a source with knowledge of the matter, and comes as the firm is raising capital for a second Asia fund, targeted at up to $6 billion.
SFS has agreed to buy Unisteel, which has manufacturing facilities inChina and Malaysia, through its wholly owned subsidiary SFS intec, creating a combined business with over 7,000 employees and operations across Europe, Asia and North America.
KKR acquired Unisteel through a leveraged buyout in 2008 for $575 million, beating out bids from Bain Capital and Carlyle Group (CG.O) to delist the precision engineering firm from the main board of the Singapore Stock Exchange.
At the time, the deal was KKR's second acquisition of a Singapore disc drive maker in a year, and was part of an early wave of U.S. private equity funds investing in Singapore's established technology companies.
Some of those companies have faced difficulties repaying loans used to buy them, and private equity funds have tapped non-traditional funding avenues to overcome difficult initial public offering and bank loans markets.
Earlier this year, KKR refinanced debt used to buy Singapore's MMI, also a hard disc component maker, with a $300 million bond, the first time a high-yield bond in Asia had been used to take out a buyout loan.
In recent years, global private equity firms operating in Asia have increased their focus on emerging markets like China, India and, more recently, Indonesia. KKR is currently among bidders for Indonesia's private healthcare operator Siloam.
The Unisteel deal is expected to be completed in the third quarter of 2012.
This article is copyrighted by Reuters
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