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Friday, 20 February 2015 14:32

Auto supplier Burke E. Porter to sell to Chinese firm for $90M

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Automotive supplier Burke E. Porter Machinery Co. expects to finalize the sale of the Grand Rapids-based company to a Chinese firm later this month, MiBiz has learned.  

The buyer, Beijing and Hong Kong-based China Everbright Ltd., intends to purchase all of the outstanding shares of the manufacturer of industrial machinery for $90 million, according to a filing with the Stock Exchange of Hong Kong. The family-owned Burke E. Porter’s total overall assets were valued at $110.6 million as of March 31, 2014, according to a filing dated Oct. 21, 2014.

The parties have not yet finalized the deal, which still requires final regulatory approval by the U.S. government, said Kevin Hykin, director of global marketing and new business development at Burke E. Porter.

The filing reported the deal was expected to close by Jan. 31 of this year and outlined allowances for an extension of that deadline to Feb. 28.

Hykin added that he didn’t expect any complications to derail the acquisition.

David DeBoer, the company’s president, was traveling today and was unavailable for comment.

Burke E. Porter has been in business since 1953. Its majority shareholders are relatives of the company’s founder.

The company manufactures automotive testing equipment and precision machined products, including dynamometers, alignment systems, automation products and other testing products for the automotive industry. Burke E. Porter has also supplied the alternative energy sector with its wind turbine gearbox dynamometer product, as MiBiz previously reported.

In addition to its world headquarters at 730 Plymouth Avenue NE in Grand Rapids, the company also has locations in Belgium, Brazil, China, Germany, India, Japan and Korea, according to its website. Burke E. Porter entered the China market in 1995.

Everbright is a Chinese-owned private equity group with at least partial ownership by the Chinese government, Hykin said.

The deal “provides an attractive investment opportunity for (Everbright) to develop its cross-border investment activities and will form the core part of (Everbright’s) global private equity and macro asset management initiatives,” the Chinese firm said in the filing.

Upon closing, the buyer intends to maintain Burke E. Porter’s management team.

Burke E. Porter had net income after taxes of $7.0 million in the fiscal year that ended March 31, 2014, down from $8.1 million in the previous fiscal year, Everbright disclosed in the filing.

Everbright is a business conglomerate that offers project investment, construction engineering, operation management, technology development and equipment manufacturing capabilities, according to the firm’s website.

The deal is another example of the current influx of Chinese firms buying U.S. manufacturers, said Jim Gillette, an independent automotive industry analyst in Grand Rapids. The Chinese buying activity is analogous to the period in the 1990s when the Japanese auto suppliers started investing in building their manufacturing presence in the States, Gillette said.

“Chinese companies have been buying a lot of U.S. firms and using it as an entry to our market,” Gillette said. “The Chinese have gathered so many dollars, so much foreign exchange, that they have to do something with it.”

Moreover, the Burke E. Porter acquisition is just another example of how West Michigan is a part of the global economy, he said.

“I don’t see it as any cause for concern,” he said, noting that foreign-owned firms employ thousands of people in West Michigan. “I think it’s a positive.”

– MiBiz Managing Editor Joe Boomgaard contributed reporting to this story

Read 12891 times Last modified on Monday, 08 June 2015 10:53

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