AutomotiveIQ - Amherst Partners

September 2012
AutomotiveIQ
Summary of Automotive M&A and Capital Markets Activity
Recent Deal Activity: September 2012
April 3, 2012 - Cooper-Standard Automotive, Inc., a subsidiary of Cooper-Standard
Holdings, Inc. (OTC: COSH), acquired certain assets and intellectual property associated with the thermal management business of automotive supplier EDC Automotive
LLC. Located in Auburn Hills, Michigan, EDC manufactures fluid and thermal management components. Financial terms of the transaction were not disclosed.
April 12, 2012 - JL French Automotive Castings, Inc., of Sheboygan, Wisconsin, announced a definitive agreement to be acquired by aluminum automotive component
supplier Tenedora Nemak, S.A. de C.V., a Mexican-based subsidiary of Alfa, S.A. de
C.V. (MSE: ALFA). Total transaction value was $215 million. Founded in 1968 and operating six facilities in the U.S., Spain and China, JL French supplies high pressure die
cast aluminum components and assemblies. In 2011, JL French generated revenue of
approximately $500 million and EBITDA of $52 million.
April 18, 2012 - German automaker Audi AG (DB:NSU), a subsidiary of Volkswagen
AG, agreed to acquire Ducati Motor Holding S.p.A., from Italian private equity firm
InvestIndustrial at a valuation of $1.13 billion. Ducati, located in Bologna, Italy, designs
and manufactures luxury and high performance racing motorcycles. In 2011, Ducati
reported revenue of approximately €480 million and EBITDA of €94 million.
May 3, 2012 - French automotive supplier Faurecia S.A. (ENXTPA:EO), a unit of PSA
Peugeot Citroën S.A. (EPA:UG), agreed to acquire the interior components business
of Automotive Components Holdings LLC, a subsidiary of Ford Motor Company
(NYSE:F). From its single plant location in Saline, Michigan, the interior components
business generates annual sales of approximately $1.1 billion supplying 12 vehicle programs assembled at eight Ford plants throughout North America. Financial terms of
the transaction were not disclosed.
May 4, 2012 - Dayton Parts, LLC, a portfolio company of Capital Partners, Inc., has
been acquired by AEA Investors LP and company management. Headquartered in
Harrisburg, Pennsylvania, Dayton Parts is the leading specialty distributor of undercarriage replacement truck and trailer parts to the U.S. medium and heavy duty vehicle
aftermarket. Financial terms of the transaction were not disclosed.
May 11, 2012 - Borgers France S.A.S., a subsidiary of German-based Borgers AG,
has been acquired by Faurecia S.A. (ENXTPA:EO). Borgers France was founded in
1971 and manufactures textile products for automotive interiors. The approximately
170 employees will be retained. Financial terms of the transaction were not disclosed.
May 25, 2012 - Delphi Automotive (NYSE:DLPH) announced a binding offer to acquire the motorized vehicles division (“MVL”) of FCI Group of Guyancourt, France,
from private equity firm Bain Capital LLC. The transaction is valued at approximately
$970 million and is expected to be completed by the end of 2012. With annual revenue
of approximately €692 million in 2011, MVL is a leading global manufacturer of connectors linking airbag components, and Delphi is its largest customer. The transaction
will accelerate Delphi’s entry into the high-growth safety restraint systems segment and
enhance its portfolio of connectors for hybrid and electric vehicles.
May 30, 2012 - Flex-N-Gate Corporation agreed to acquire the headlamp and taillight business from Automotive Components Holdings LLC (“ACH”), a subsidiary of
Ford Motor Company (NYSE:F). The sale includes the ACH injection molding plant
in Sandusky, Ohio, and the automotive lighting service parts operation in Bellevue,
Ohio. Flex-N-Gate, a privately owned supplier based in Urbana, Ill., will combine the
acquired business with its Ventra operating group. Financial terms of the transaction
were not disclosed.
June 11, 2012 - New York private equity firm Monomoy Capital Partners acquired
High Performance Industries, Inc. (“Holley”) to establish a new investment platform. Holley, founded in 1903 and based in Bowling Green, Kentucky, manufactures
high-performance products for the automotive aftermarket. Its products, which include
carburetors, electronic fuel injection kits, exhaust headers and fuel pumps, are marketed under a variety of well known brands. Financial terms of the transaction were
not disclosed.
July 2, 2012 - Federal-Mogul Corp. (Nasdaq:FDML) acquired the BERU spark plug
business unit of BorgWarner Inc. (NYSE: BWA). Federal-Mogul will assume control
of BERU plants in Chazelles sur Lyon, France, and Neuhaus, Germany, which together
employ 500 workers. As a result of the transaction, Southfield, Michigan-based Federal-Mogul will increase its spark plug capacity by more than 350 million units per year
and boost annual sales by approximately $80 million. BorgWarner, headquartered in
Auburn Hills, Michigan, announced it will incur a pretax loss of $50 million to $60 million as a result of the deal. Other financial terms of the transaction were not disclosed.
July 4, 2012 - Volkswagen AG (DB:VOW) agreed to acquire the remaining 50.1%
stake in Dr. Ing. h.c.F. Porsche AG not already owned by Volkswagen from Porsche
Automobil Holding SE (DB:PAH3). The announced purchase price of €4.46 billion
in cash is based on an equity value of €3.88 billion plus the value of Porsche holding
company dividend payments and the present value of half of the additional €320 million in forecast synergies. The companies agreed to combine in 2009 after Porsche
accumulated more than €10 billion of debt in an unsuccessful attempt to acquire Volkswagen in 2005. The transaction is subject to review by the German Federal Financial
Supervisory Authority.
July 11, 2012 - French carmaker PSA Peugeot Citroen (EPA:UG) agreed to acquire
full ownership of Société Européenne de Véhicules Légers (“Sevelnord”) from Fiat
Group Automobiles S.p.A. Sevelnord, a joint venture formed in 1988 with Italian partner Fiat, began assembly of commercial vans in 1993 in Lieu Saint-Amand, France.
Sevelnord will continue producing vehicles for both partners until Euro6 emission standards take effect at the end of 2016. The transaction is subject to regulatory approval
and is anticipated to close by the end of 2012. Financial terms of the transaction were
not disclosed.
July 11, 2012 - Stant Corporation, a leading manufacturer of highly engineered vapor
and fluid control components owned by Miami-based private equity firm H.I.G. Capital, acquired a majority interest in Pyongsan-FT Corp. from Pyongsan Corporation.
The joint venture will be renamed Stant Korea Corporation. Headquartered in South
Korea, Pyongsan-FT was formed in 2011 to provide fuel filler tubes to automotive manufacturers in Asia. Financial terms of the transaction were not disclosed.
July 18, 2012 - The emission control products business of German-based Hilite International has been acquired by Cummins, Inc. (NYSE: CMI). Hilite’s selective catalytic
reduction (SCR) dosing technology, which focuses on aftertreatment systems for heavy
duty vehicles, will become part of the Cummins Emission Solution operating unit. Headquartered in Columbus, Indiana, Cummins reported net earnings of $1.85 billion on sales
of $18.0 billion in 2011. Financial terms of the transaction were not disclosed.
June 20, 2012 - French injection molder Plastal S.A.S., a subsidiary of Swedish Plastal
Group AB, agreed to be acquired by Faurecia S.A. (ENXTPA:EO). Plastal is a supplier
of engineered plastic components to the automotive industry and has strong market
positions in the premium car and the light and heavy truck markets. Financial terms of
the transaction were not disclosed.
July 20, 2012 - Austria-based Benteler Automotive International Beteiligungs
GmbH, an operating unit of Benteler International AG, acquired Farsund Aluminum
Casting AS. Farsund, located in Norway, is a full lifecycle supplier of low pressure
die cast aluminum products. Benteler is a fourth-generation family owned automotive
parts firm. Financial terms of the transaction were not disclosed.
July 31, 2012 - Dutch private equity firm Egeria BV agreed to acquire Mirror Controls
International B.V. from private equity firm Bregal Capital LLP. Netherlands-based
Mirror Controls, a former Eaton subsidiary (acquired by Bregal Capital in 2007) is a Tier
2 component supplier of motorized actuators for exterior automotive mirror systems,
with a global market share of approximately 33%. Consideration will be paid in the
range of €170 to €180 million.
July 31, 2012 - Luxfer Holdings PLC agreed to acquire all of the outstanding shares
of Dynetek Industries Ltd. (TSX:DNK) for CAD$5 million in cash. Dynetek’s 2011
revenue was CAD$26 million. Based in Canada, Dynetek manufactures compressed
natural gas (CNG) cylinders and alternative fuel systems for buses and heavy-goods
vehicles and is a global authority on portable hydrogen containment. Luxfer is a leading manufacturer of high-pressure gas cylinders with six global manufacturing plants.
Source: Capital IQ and Amherst Partners
A m her s t P a r t ner s .com
AutomotiveIQ
U.S. Public Supplier Trading Multiples
Median(2)
Average
$ 1,093.0
$ 2,649.6
$ 2,414.0
$ 3,574.6
8.5%
9.8%
0.85x
0.92x
.62x
.91x
.39x
.56x
5.09x
5.34x
7.60x
8.51x
Source: Capital IQ (as of June 30, 2012)
(1) TEV (“Total Enterprise Value”) is defined as net debt plus preferred equity, minority interest and market capitalization.
(2) Median and average values exclude all negative and non-meaningful numbers.
Index Value
Amherst Partners’ Automotive Supplier Index
Note: The supplier index used in this newsletter has been compiled by Amherst Capital Partners, LLC solely for illustrative purposes. The Companies chosen for the index are publiclytraded companies that are commonly used for industry composites representing sector stock performance. The index does not include all public companies that could be categorized
within the sector, and was not created as a benchmark, nor should it imply benchmarking or a recommendation for a particular stock and/or sector.
Total Units Sold ( in millions)
U.S. Total Vehicle Sales
Source: IHS
A m her s t P a r t ner s .com
AutomotiveIQ
EBITDA Margin
US $s (in billions)
Select Global OEM Aggregate Sales and EBITDA Margin
Note: Asian Aggregates include - Toyota Motor Corp., Honda Motor Co., Ltd., Nissan Motor Co. Ltd., Hyundai Motor Co., Suzuki Motor Corp., Mazda Motor Corp., Kia Motors Corp., Mitsubishi Motors Corp., and Daihatsu Motor
Co. Ltd.; Europe Aggregates include - Volkswagen AG, Daimler AG, BMW Group, Fiat S.p.A., PSA Peugeot Citroen, Renault SA, and Audi AG; North American Aggregates include – Ford Motor Co. and General Motors Company.
Excludes Chrysler.
U.S. Supplier Index Enterprise Value as a Multiple of EBITDA
Source: Capital IQ
Global Automotive M&A Activity
Source: Capital IQ
Total Transaction Volume (#)
U.S. Supplier Index Total Debt as a Multiple of EBITDA
Search Criteria: (1) Automobiles and Components (Primary); (2) Mergers or acquisitions for
majority control; (3) Transactions Announced Date (Including Bids and Letters of Intent)
A m her s t P a r t ner s .com
Source: Capital IQ, OneSource, SEC filings, company information and Amherst research.
AutomotiveIQ
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Amherst Partners’
Automotive Team Contacts
Don Luciani, Partner
Head of Automotive Industry Team
248.633.2139
dluciani@amherstpartners.com
Scott Eisenberg, Managing Partner
248.633.2150
seisenberg@amherstpartners.com
Chas Chandler, Partner
248.633.2140
cchandler@amherstpartners.com
Sheldon Stone, Partner
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sstone@amherstpartners.com
Jonathan Martin, Managing Director
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Brian Phillips, Managing Director
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Eamon Moran, Director
248.633.2143
emoran@amherstpartners.com
Steve Sadowski, Director
248.633.2137
ssadowski@amherstpartners.com