(Bloomberg) -- Alat, a unit of Saudi Arabia’s sovereign wealth fund, has bought 15% of TK Elevator and unveiled a joint venture that will make escalators and moving walkways, as the kingdom looks to boost domestic manufacturing.
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Financial details and the names of the selling shareholders were not disclosed. The deal gives TK Elevator an equity value of about €12 billion ($12.6 billion), or an enterprise value of more than €23 billion after taking into account the company’s net debt, people with knowledge of the matter said.
Representatives for Alat and TK Elevator’s private equity owners declined to comment.
The deal comes five years after TK Elevator, formerly owned by Thyssenkrupp AG, was sold to a group backed by Advent International, Cinven, Abu Dhabi Investment Authority and Germany’s RAG Foundation for €17.2 billion in one of the largest private equity deals in Europe.
Alat will also form a €160 million joint venture with TK Elevator, according to a statement. This newly-formed entity, headquartered in Saudi Arabia, will over time locally manufacture elevators, escalators and moving walkways for use in the kingdom’s construction projects, which include everything from luxury resorts to entirely new cities.
The transaction is expected to be completed by the third quarter.
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Saudi Arabia’s $1 trillion Public Investment Fund is increasingly using its heft to require foreign companies to invest in the kingdom as part of its efforts to fulfill the crown prince’s ambitious Vision 2030 agenda to diversify the economy away from oil.
With $100 billion to spend, Alat looks set to become a powerful force to further these goals. Last year, the firm invested in a convertible bond issued by Lenovo Group Ltd. and the Chinese computer-maker agreed to open a manufacturing facility and establish its regional headquarters in Saudi Arabia.
That deal was part of a string of announcements from Alat, including partnerships with SoftBank Group Corp. and a Chinese surveillance equipment maker to set up local manufacturing facilities.
(Updates to add value in second paragraph.)
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