MidOcean Shifts Gears with $300M Cloyes Deal, Spotlighting PE Trend

NEW YORK, NY – May 04, 2026 – MidOcean Partners, a New York-based private equity firm, has finalized a landmark transaction that signals a significant strategic shift in the private equity landscape. The firm announced the successful closing of an approximately $300 million single-asset continuation vehicle for Cloyes Gear and Products, Inc., a leading manufacturer of critical automotive timing systems.

The deal, led by a substantial commitment from Hamilton Lane as the sole lead investor, allows MidOcean to extend its ownership of a high-performing asset while providing fresh capital for future growth. This move not only underscores the robust health of the automotive aftermarket but also places a spotlight on the increasing sophistication of private equity exit strategies in a complex market.

A New Blueprint for Private Equity Exits

The transaction is a prime example of the burgeoning use of continuation vehicles, a tool that has rapidly moved from the periphery to the core of private equity strategy. Once reserved for difficult situations, these vehicles are now a preferred method for general partners (GPs) to retain control of their most successful portfolio companies, or “trophy assets,” beyond a traditional fund’s lifespan.

In a market where initial public offerings (IPOs) and traditional M&A exits face headwinds, continuation funds offer a compelling alternative. They provide a dual solution: offering liquidity to existing limited partners (LPs) who may wish to cash out, while allowing both the GP and rolling-over LPs to participate in the asset’s next phase of value creation. Research indicates that GP-led secondary transactions, primarily driven by continuation funds, now account for nearly half of all secondary market volume, a dramatic increase over the last five years. Single-asset deals, like the one for Cloyes, represent the fastest-growing segment of this market.

MidOcean’s move allows it to avoid being a “forced seller” of a company it believes has significant runway left. “Cloyes is a high-quality, market-leading business with a strong track record of performance and a differentiated position in the automotive aftermarket,” said Daniel Penn, Managing Director at MidOcean. “This transaction underscores our conviction in Cloyes’ long-term value creation potential.”

The Enduring Engine of the Automotive Aftermarket

The confidence expressed by MidOcean and Hamilton Lane is firmly rooted in the resilient and non-discretionary nature of the automotive aftermarket. Cloyes, which specializes in mission-critical timing drive systems, operates in a sector buoyed by powerful and enduring macroeconomic trends. The average age of vehicles on North American roads continues to climb, now exceeding 12 years. Older vehicles inherently require more frequent repairs and replacement parts, creating a steady stream of demand for suppliers like Cloyes.

Furthermore, the increasing complexity of modern internal combustion engines and hybrid vehicles makes repairs more specialized, driving demand for high-quality, precision-engineered components. During periods of economic uncertainty, consumers often delay purchasing new cars, opting instead to invest in maintaining their existing vehicles, further fueling the aftermarket engine. Cloyes, with its founding in 1921 and its established brand recognition, is perfectly positioned to capitalize on these dynamics.

“Cloyes has built a reputation as a trusted supplier of critical engine components, and demand for our products remains strong,” said John Hanighen, Chief Executive Officer of Cloyes. With the new capital injection, the company plans to pursue further strategic initiatives. “With MidOcean’s continued support, we are focused on expanding our product offerings, enhancing our supply chain capabilities, and delivering best-in-class service to our customers worldwide,” Hanighen added.

Doubling Down on a Proven Winner

This continuation vehicle is not the beginning of the story, but rather a pivotal next chapter in a successful partnership. MidOcean first invested in Cloyes in 2022 and has since worked with its management team to drive substantial growth. The company has expanded its product categories, executed strategic acquisitions, and implemented operational improvements that have solidified its market leadership.

The new structure, which includes an additional investment from MidOcean-managed entities, will provide the capital to accelerate this strategy. The funds are earmarked to support further growth, both organically and through acquisitions, allowing Cloyes to consolidate its position in the fragmented automotive parts sector. The appointment of CEO John Hanighen to the additional role of Chairman of the Board reflects the private equity firm's continued confidence in the existing leadership team to steer the company through its next phase of expansion.

This move illustrates a modern approach to private equity value creation: rather than a simple buy-and-sell model, firms like MidOcean are acting as long-term strategic partners, reinvesting in their most successful assets to maximize returns over an extended horizon.

The Secondary Market's Stamp of Approval

The structure and success of the deal are heavily validated by the participation of Hamilton Lane, a global private markets investment giant. As the sole lead investor, Hamilton Lane’s commitment provides a powerful endorsement of both Cloyes’ fundamental value and MidOcean’s strategy. For secondary investors like Hamilton Lane, single-asset continuation vehicles offer a unique opportunity to bypass the “blind pool” risk of traditional fund investing and gain concentrated exposure to a proven, high-quality asset with a clear growth trajectory.

“Cloyes represents a compelling investment opportunity, underpinned by its strong market leadership and exposure to durable automotive aftermarket trends,” stated Tom Kerr, Co-Head of Investments and Co-Head of Secondary Investments at Hamilton Lane. This sentiment captures the core appeal of the deal for new investors, who gain access to a de-risked asset with an established management team and a clear path forward.

The transaction, advised by Piper Sandler & Co. and Kirkland & Ellis LLP, demonstrates a maturing market where sophisticated investors are aligning to create bespoke solutions that benefit all stakeholders. “We look forward to partnering with MidOcean and Cloyes’ management to support the Company’s next phase of growth,” Kerr affirmed, signaling a collaborative approach to unlocking the full potential of the investment.