RDIF Teams up With One Equity Partners in Rare Russian buyout

Private Equity News, 19.06.2013

Rare glimpse of buyout activity in the Russian Federation as the government-backed fund teams up with private equity

Private equity firm One Equity Partners and U.S. manufacturer Titan International have teamed up with the Kremlin backed Russian Direct Investment Fund to acquire one of the country’s largest agricultural manufacturers. The deal comes despite lackluster deal figures so far this year in Russia’s under-performing private equity market.

In a statement released on June 19, RDIF – the $10 billion private equity fund created by the Russian government to spur investment in the country – said it had agreed to acquire Voltyre-Prom, a producer of agricultural tires.

The consortium will own a controlling stake in Voltyre-Prom, with Titan International becoming its managing partner, RDIF said in a statement. The price of the transaction was not disclosed, and RDIF declined to comment on the financial terms of the deal.

According to the RDIF, Voltyre-Prom is one of Russia’s largest agricultural manufacturers. Its market share in agricultural tires was 43% and 16% in industrial tires in 2012, while it produced circa 1.35 million tires in 2012, according to the statement.

RDIF’s management is a 100% subsidiary of Russian Development bank Vnesheconombank. The fund was set up in September 2011 to encourage foreign investment into Russia, and was backed by Blackstone Group co-founder Stephen Schwarzman Apax Partners chief executive Martin Halusa, Apollo Management chairman and chief executive Leon Black and other high ranking global buyout executives on its launch.

However, since the fund’s launch, new buyouts have remained relatively rare in Russia. According to data provider Dealogic there were 14 new buyouts recorded last year, and just one so far this year, compared to 26 in 2008.

One Equity Partners’ involvement in the deal marks the first acquisition for the firm since its since its banking parent, JP Morgan Chase, confirmed on June 17 it would spin out the unit.