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AutomotiveIQ
Summary of M&A and Capital Markets Activity in the Automotive Industry Amhers tPar tners .com
Second Quarter 2017
February 5, 2017 - Spain-based CIE Automotive S.A. (BME:CIE) acquired Rochester Hills, Michigan-based Newcor Inc. Newcor manufactures precision machined components, specializing in machining medium to high volume forgings, solid steel blanks, and castings. CIE management noted the acquisition allows CIE to extend its presence in the United States. The announced transac-tion value was $106 million.
February 6, 2017 - Southfield, Michigan-based Lear Corporation (NYSE:LEA) acquired the seating and metal business unit of Spain-based Grupo Antolin Irausa S.A. Grupo Antolin’s seating business, headquartered in France, is composed of just-in-time seat assem-bly, seat structures and mechanisms, and seat trim. Lear manage-ment cited Grupo Antolin’s management team, facilities, high-func-tionality and light-weight seat designs, and European presence, as key drivers for the transaction. The announced transaction value was $307 million, which implies a revenue multiple of 1.0x.
February 7, 2017 - Private equity group Industrial Opportunity Partners LLC acquired Westland, Michigan-based GT Technologies Inc. GT supplies performance-critical valve-train systems and com-ponents for gasoline, flex fuel, and diesel internal combustion engines. Industrial Opportunity noted that their investment partner-ship with GT’s management team provides capital and industry experience to leverage growth in its niche market segment. The financial terms of the transaction were not disclosed.
February 13, 2017 - Maumee, Ohio-based Dana Incorporated (NYSE:DAN) acquired the axle housing and driveline shaft manufac-turing operations of Warren, Michigan-based U.S. Manufacturing Corporation. U.S. Manufacturing manufactures axle tubes and hol-low axle shafts. Dana management noted the acquisition provides Dana with U.S. Manufacturing’s proprietary tube-manufacturing processes and intellectual property for light-weight, thin-wall axle tubes and hollow axle shafts, expands Dana’s manufacturing foot-print in the United States, and strengthens the supply chain for Dana’s most strategic customers and programs. The announced transaction value was $100 million.
February 14, 2017 - Private equity group Kinderhook Industries LLC acquired Mentor, Ohio-based Performance Sports International from Dover Corporation (DOV:NYSE) and created Racing Winning Brands. Race Winning Brands manufactures performance and racing pistons and engine components. Kinderhook management cited Performance Sports’ market leadership in the automotive and power sports performance markets as the key driver for the acquisi-tion. The announced transaction value was $150 million.
February 21, 2017 - Singapore-based Flex Ltd. (Nasdaq GS:FLEX) acquired Troy, Michigan-based AGM Automotive LLC. AGM Automotive manufactures lighting products, electronic assemblies, floor mats and carpets, electrical components, interior assemblies, and carpeting/soft trims for the automotive industry. Flex manage-ment noted the acquisition will complement and expand Flex’s automotive lighting offerings and strengthen key strategic cus-tomer relationships. The financial terms of the transaction were not disclosed.
Recent Deal Activity Q1/Q2 2017
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April 4, 2017 - Naugatuck, Connecticut-based The Eastern Company (Nasdaq GM:EML) announced an agreement to acquire New Berlin, Wisconsin-based Velvac, Inc. Velvac manufactures proprietary vision systems and component parts for the truck, bus, recreational, and specialty vehicle industries. Eastern management noted that the transaction adds a new growth platform in the truck and motorhome markets. The announced transaction value was $40 million, which implies a revenue multiple of 0.7x.
April 25, 2017 - Milwaukee, Wisconsin-based REV Group, Inc. (NYSE:REVG) acquired Elkhart, Indiana-based Midwest Automotive Designs LLC. Midwest converts sprinter vans into luxury conversion vans, executive limousines, corporate limousine vans, mobile office vans, mobility vans, and golf vans for limousine, executive, RV, and private travel needs. REV management noted that Midwest’s custom shuttle buses, limousines, and executive transportation vehicles complement REV’s existing commercial vehicle line. The financial terms of the transaction were not disclosed.
April 25, 2017 - Milwaukee, Wisconsin-based REV Group Inc. (NYSE:REVG) acquired Holden, Louisiana-based Ferrara Fire Apparatus Inc. Ferrara Fire Apparatus manufactures fire and emergency response vehicles. REV management noted that the acquisition enhances REV’s product offering in its fire and emer-gency segment, particularly with custom chassis pumpers, aerials, and industrial apparatus. The financial terms of the transaction were not disclosed.
May 11, 2017 - Costa Mesa, California-based Agility Fuel Solutions LLC acquired Georgetown, Texas-based CleanFuel USA Inc. CleanFuel manufactures liquid-injection propane fuel systems for commercial vehicles, as well as propane autogas dispensers and refueling equipment. Agility management noted the transaction will allow Agility to immediately offer complete propane fuel systems for commercial vehicles based on patented liquid propane injection technology and turnkey propane fueling packages for both private fleet and retail locations. The financial terms of the transaction were not disclosed. June 2, 2017 - Wixom, Michigan-based Curt Manufacturing LLC, a portfolio company of private equity group Audax Private Equity, announced an agreement to acquire Perry, Florida-based United Welding Services Inc. United Welding manufactures truck boxes and accessories. Curt management noted the acquisition added a new product line, increased customer base, and manufacturing capacity. The announced transaction value was $22 million, which implies a revenue multiple of 0.6x.
June 19, 2017 - Evansville, Indiana-based Accuride Corporation announced an agreement to acquire Germany-based mefro wheels GmbH. Mefro wheels manufactures steel wheels for car, truck, and truck-trailer industries for OEMs and tire producers. Accuride management cited mefro’s ability to service global cus-tomers as the key driver for the acquisition. The financial terms of the transaction were not disclosed.
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Automotive Supplier Trading Multiples
(1) EV (“Enterprise Value”) is defined as market capitalization plus net debt, preferred equity and minority interest.(2) Median and mean values exclude all non-meaningful values.
Amherst Partners Automotive Supplier Index
Source: Capital IQ
Ind
ex V
alu
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U.S. Total Vehicle Sales
Source: IHS
Source: Capital IQ (as of June 30, 2017)
70%80%90%
100%110%120%130%140%150%160%170%
Amherst Partners' Supplier Index S&P 500 Stock Index Source: Capital IQ. Left Axis: Index Value
10.4 11.6
12.7 14.4
15.5 16.4
17.8
8.6 8.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2010 2011 2012 2013 2014 2015 2016 YTD16 YTD17
Tota
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CHART TITLE: U.S. Total Vehicle Sales
Source: Ward's Automotive Left Axis: Total Unis Sold (in millions)
CHART TITLE: U.S. Total Vehicle Sales
Source: Ward's Automotive Left Axis: Total Unis Sold (in millions)
($ in millions) 06/30/17 Qtrly Price Market Total LTM Gross EBITDA Net Debt/ Enterprise Value/LTMCompany Stock Price Change Cap. EV(1) Revenue EBITDA Margin Margin EBITDA Revenue EBITDA
American Axle & Manufacturing 15.60$ (17%) 1,734$ 2,776$ 4,029$ 643$ 19% 16% 1.6x 0.7x 4.3xBorgWarner Inc. 42.36 1% 8,990$ 11,003$ 9,209$ 1,536$ 22% 17% 1.3x 1.2x 7.2xCooper Tire & Rubber Co. 36.10 (19%) 1,911$ 1,914$ 2,918$ 553$ 23% 19% NM 0.7x 3.5xDana Holding Corporation 22.33 16% 3,228$ 4,759$ 6,078$ 668$ 15% 11% 2.1x 0.8x 7.1xGentex Corp. 18.97 (11%) 5,450$ 4,751$ 1,746$ 616$ 39% 35% NM 2.7x 7.7xGentherm Incorporated 38.80 (1%) 1,426$ 1,455$ 951$ 158$ 33% 17% 0.2x 1.5x 9.2xGoodyear Tire & Rubber Co. 34.96 (3%) 8,803$ 14,002$ 15,166$ 2,497$ 27% 16% 2.0x 0.9x 5.6xJohnson Controls Inc. 43.36 3% 40,676$ 54,721$ 42,598$ 3,996$ 22% 9% 3.3x 1.3x 13.7xLear Corp. 142.08 0% 9,788$ 10,613$ 18,893$ 1,899$ 12% 10% 0.4x 0.6x 5.6xMeritor, Inc. 16.61 (3%) 1,471$ 2,360$ 3,074$ 248$ 14% 8% 3.5x 0.8x 9.5xModine Manufacturing Co. 16.55 36% 829$ 1,308$ 1,503$ 126$ 17% 8% 3.8x 0.9x 10.4xShiloh Industries Inc. 11.74 (14%) 210$ 446$ 1,051$ 70$ 11% 7% 3.4x 0.4x 6.4xStandard Motor Products Inc. 52.22 6% 1,192$ 1,258$ 1,102$ 149$ 30% 14% 0.4x 1.1x 8.4xStoneridge Inc. 15.41 (15%) 434$ 559$ 738$ 80$ 29% 11% 1.4x 0.8x 7.0xSuperior Industries International 20.55 (19%) 512$ 482$ 721$ 81$ 11% 11% NM 0.7x 6.0xTenneco Inc. 57.83 (7%) 3,126$ 4,415$ 8,755$ 768$ 17% 9% 1.5x 0.5x 5.7xTower International, Inc. 22.45 (17%) 460$ 877$ 1,922$ 183$ 12% 10% 2.2x 0.5x 4.8x
Median(2) 19% 11% 1.8x 0.8x 7.0xMean 21% 13% 1.9x 0.9x 7.2x
Global OEM Aggregate Sales and EBITDA Margin
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Supplier Index - Median Net Debt/LTM EBITDA
Source: Capital IQ
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Supplier Index - Median Enterprise Value/LTM EBITDA
Source: Capital IQ
Global Automotive M&A Activity
Tota
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)
Source: Capital IQ
Sources: Capital IQ, OneSource, SEC filings, company information and Amherst research.
Search Criteria: (1) Automobiles and Components (primary); (2) Mergers or acquisitions for majority control; (3) Transactions announced date (Including bids and letters of intent)
6.6x 7.0x 6.0x
7.3x 6.7x 7.1x 6.3x 6.1x 6.2x
5.6x 6.6x 7.0x 7.0x 7.0x
.0x
2.0x
4.0x
6.0x
8.0x
10.0x
Chart Title: U.S. Supplier Index Median Enterprise Value/LTM EBITDA Source: Capital IQ.
$1,503.4 $1,619.2
$1,766.2 $1,797.4 $1,703.2 $1,798.4 $1,879.7 $1,866.1 $1,811.0
9.9% 9.5% 9.4% 10.3% 9.8% 10.2% 10.7% 10.5% 10.8%
0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%
$- $200.0 $400.0 $600.0 $800.0
$1,000.0 $1,200.0 $1,400.0 $1,600.0 $1,800.0 $2,000.0
2010 2011 2012 2013 2014 2015 2016 YTD16 YTD17
Agg. Asian Sales Agg. European Sales Agg. North American Sales Total OEM EBITDA Margin
112 95 91 90 100 88
105 88 87
39 32
270
192 213
257 245
190 217 222
268
128 133
0
50
100
150
200
250
300
350
2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD16 YTD17Domestic International
1.5x 1.4x 1.3x 1.3x 1.6x
1.8x 1.8x 1.4x 1.6x
1.4x 1.4x 1.5x 1.8x 1.8x
.0x
1.0x
2.0x
3.0x
Chart Title: U.S. Supplier Index Median Net Debt/EBITDA Source: Capital IQ.
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Scott Eisenberg, [email protected]
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