HSBC Private Equity led and arranged the institutional buyout of the automotive friction materials divisions of BBA Group plc. Total financing to complete the transaction was £487 million (€776 million) and was provided through a combination of institutional equity, senior debt and mezzanine facilities. 

Operating in 13 manufacturing facilities world-wide, the division employs over 3,600 people and is Europe's leading manufacturer of friction materials used in braking systems for the automotive sector. It manufactures the full range of friction material products, including disc brake pads, and drum brake linings for both the passenger and commercial vehicle markets. Main brands include Textar, Mintex and Don. 

It is also a leading supplier to the European replacement market through automotive dealer networks and independent garages and retailers. The replacement market represented approximately 70% of revenues in 1999. Total sales in 1999 amounted to £300.6 million. The division has also made significant investment in new technology and equipment over the last five years to build on its leading market position and provide opportunities for expansion in the future. 

Chris Masterson, managing director, HSBC Private Equity, said: "The private equity sector is making substantial investments in the automotive components industry, which is undergoing a phase of consolidation. HSBC Private Equity has a successful track record in backing this sector. The division is both a market and technological leader and has strong management growth prospects. It is well placed to take advantage of current opportunities in Europe, the US and the Far East."

Dr Bauer, chief executive of the division, said: "This deal gives the business the financial resources and operational independence to consolidate and build upon its current market position. The global opportunities in the automotive friction market over the next few years are significant and we intend to exploit them fully."