London-based investment fund Pamplona Capital Management has bought bankrupt German brake pad maker TMD Friction, TMD said on Friday.

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TMD said the purchase would safeguard approximately 3,800 jobs worldwide and completion of the acquisition was expected by the end of April. The sale price was not disclosed.


TMD Friction supplies global automotive and commercial OEMs and is also one of the largest suppliers to the global aftermarket with its Textar, Pagid, Mintex, Don, Cobreq, and Cosid brands. It operates from locations across Europe, the US, Brazil, Mexico, China and Japan.


Chief executive Derek Whitworth said: “I’m delighted to be partnering with Pamplona who are highly supportive of TMD Friction and the long-term outlook for the group. Today marks the end of a difficult period of uncertainty. TMD Friction is now debt free, and with our financial constraints resolved I am confident that we can continue to build on our leading market position, as evidenced by recent platform wins with customers such as BMW, Mercedes-Benz, Opel, Porsche and VW.”


Frank Kebekus of Kebekus & Zimmermann, the insolvency administrator, said: “This concludes a successful and well-run auction process. The significant level of interest in the business demonstrates the strong fundamentals and attractiveness of the group.

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“Clearly the new owners, led by the TMD Friction management team, are highly supportive and are determined to ensure the long term success of the business.”


TMD Friction had declared insolvency at its four main plants in December, after reporting a collapse in orders and a lack of credit, Reuters reported.


Montagu Private Equity acquired the group in a EUR776m (US$1.04bn) leveraged buyout in 2001. This stake was taken on by a group of hedge funds after a restructuring in 2006, which saw the company’s debts cut to EUR215m.


“I’m happy to be leaving behind a group of people who saw us more of a financial instrument,” Whitworth was quoted as saying on Friday. “We are relieved to be owned by someone that wants to own a company that makes brake pads.”