The Blackstone Group has agreed to acquire Gates Global, a global maker of power transmission belts and fluid power products, from Onex and CPPIB for $5.4 billion. The second-biggest deal in 2014 thus far after Cerberus' $9.4 billion Safeway acquisition, the sale will generate proceeds to Onex and CPPIB of around $3.5 billion total. Onex will receive around $2 billion, while CPPIB's portion will be $1.5 billion. Both firms will reap aggregate proceeds of around $4.7 billion from the sale and other distributions, resulting in a multiple of capital invested of roughly 2.2x and a return on investment of approximately 26% per annum.
Onex and CPPIB invested $2.1 billion in the $5 billion buyout of Gates in 2010. The company filed to go public before rumors of negotiations with both Blackstone and TPG arose, resulting in both firms bidding for Gates in March. TPG eventually dropped its bid, leaving Blackstone to reportedly put about $1.6 billion of equity in the deal.