Deals

H&Q Asia Pacific invests in Yuchai Engineering

H&Q Asia Pacific has made an investment in a Chinese manufacturer of small-sized excavators in a transaction that has been approved by the government.

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H&Q Asia Pacific, together with unnamed partners, have invested in a 43.4 percent stake in Yuchai Engineering Machinery Company, in a deal that has received “all relevant government approvals,” according to the Asia-focused private equity firm.

The transaction is worth $45 million (€35 million), according to a source familiar with the deal.

Yuchai Group, Yuchai Engineering’s parent company, and H&Q Asia Pacific will become majority shareholders, according to a statement. Based in Yulin city, located in China’s Guangxi province, Yuchai Engineering manufactures and exports small-sized excavators.

As a result of the investment, Andrew Kuo, head of Greater China and managing director at H&Q Asia Pacific, will be vice-chairman and executive committee member of the machinery producer.

Kuo said: “H&Q Asia Pacific sees tremendous opportunities in China’s construction and infrastructure sectors, and expects rapid growth in demand for mini construction machinery.”

Yuchai Engineering, represented by 23 sales offices and 65 exclusive agents across China, is a subsidiary of Yuchai Group, a diesel engine manufacturing group.

Last month, H&Q Asia Pacific sold an 85 percent stake it held in Mei Da Coffee, the operator of more than 60 Starbucks retail stores in Beijing and Tianjing to Starbucks Corp.