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AutomotiveIQ
Summary of Automotive Industry M&A and Capital Markets Activity Amhers tPar tners .com
Second Quarter 2016
April 1, 2016 - United Kingdom-based MAT Foundry Group Limited agreed to acquire a majority stake in German-based Schmidt Maschinenbau GmbH. Schmidt Maschinenbau devel-ops, manufactures, and distributes hi-tech transmission systems and components. MAT Foundry management cited expanded investment in the European automotive market as the primary driver for the acquisition. The financial terms of the transaction were not disclosed.
April 4, 2016 - Troy, Michigan-based Littelfuse Inc. (NasdaqGS:LFUS) acquired Italy-based Menber’s S.p.A. Menber’s manufactures and distributes battery switches and trailer con-nections for commercial vehicles. Littelfuse management cited Menber’s European presence and additional global channel access as the key drivers for the acquisition. The financial terms of the transaction were not disclosed.
April 4, 2016 - Blaine, Minnesota-based Arrowhead Electrical Products, Inc. acquired Urbandale, Iowa-based C&E Group of Companies. C&E manufactures pistons, crankshafts, camshafts, connecting rods, engine cylinders, fuel flow systems, and suspen-sion componentry for the power sports industry. AEP is a portfolio company of the private equity group The Riverside Company. Riverside management noted that C&E adds considerable new depth and expertise in internal engine components and facilitates growth through cross-selling opportunities, R&D capabilities, and an expanded global presence. The financial terms of the transac-tion were not disclosed.
April 6, 2016 - Oklahoma City, Oklahoma-based Fred Jones Enterprises acquired Whittier, California-based Tracy Industries, Inc. Tracy Industries is an automotive parts distribution company servicing Ford and Fiat Chrysler dealers. Fred Jones manage-ment cited access to West Coast markets and the ability to expand its distribution network across much of the southern United States as the key drivers for the acquisition. The financial terms of the transaction were not disclosed.
April 8, 2016 - Private equity group Douglas Acquisitions, LLC agreed to acquire substantially all of the assets of Lake Forest, California-based Quantum Fuel Systems Technologies Worldwide Inc. (OTCPK:QTWW.Q). Quantum is engaged in the development and production of compressed natural gas fuel storage tanks and packaged fuel storage systems, as well as the integration of vehicle system technologies, including engine and vehicle control systems and drivetrains. The assets were purchased as part of Quantum’s Chapter 11 bankruptcy filing. The announced transaction value was $22 million.
April 12, 2016 - Switzerland-based Johnson Electric International AG acquired France-based AML Systems SAS. AML produces and commercializes solutions for automotive lighting applica-tions. Johnson management noted that AML’s headlamp product offerings will materially broaden Johnson’s product portfolio in the sector. The announced transaction value was $74 million.
Recent Deal Activity Q2 2016
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April 19, 2016 - Irving, Texas-based AutoBodyguard, Inc. acquired Beaverton, Oregon-based Tri-Pro Group, Inc. Tri-Pro engineers and manufactures protection products for cars, recreational vehicles, and motorcycles. AutoBodyguard management cited Tri-Pro’s loyal customer base, revenue trajectory, and non-toxic product formulations, particularly in nanotechnology used in exterior paint protection, as key drivers for the acquisition. The financial terms of the transaction were not disclosed.
April 29, 2016 - Southfield, Michigan-based Maynards Industries Ltd. acquired an automotive manufacturing facility from Mitsubishi Motors North America, Inc. Maynards is an asset liquidation firm active in the disposition of automotive plants. The financial terms of the transaction were not disclosed.
May 6, 2016 - Private equity group Hall Capital Partners acquired Glendale, Arizona-based 4Knines. 4Knines manufactures heavy duty seat covers and liners for pets, kids, and other special pas-sengers. Hall Capital management cited 4Knines’ leadership in the premium end of a growing automotive accessories market as the key driver for the acquisition. The financial terms of the transaction were not disclosed.
May 16, 2016 - Private equity fund Blue Water Energy LLP acquired Argentina-based GNC Galileo. GNC Galileo provides vehicle conversion, compression, adjustment, and natural gas transport equipment. Blue Water Energy noted that with its substantial equity injection, GNC Galileo will be able to launch important growth initiatives both in technology research and development and in industry globalization. The financial terms of the transaction were not disclosed.
May 23, 2016 - Long Island City, New York-based Standard Motor Products Inc. (NYSE:SMP) acquired the automotive ignition wire business of Highland Heights, Kentucky-based General Cable Corporation (NYSE:BGC). General Cable is the world’s lead-ing manufacturer of wire and cable solutions. The acquisition includes the purchase of General Cable’s automotive ignition wire business in North America as well as a subsidiary in Mexico. SMP management cited General Cable’s long history in the industry, prestigious customer base, and accretive earnings as key drivers of the transaction. The announced transaction value was $71 million.
May 24, 2016 - Canada-based CarbonOne Technologies Inc. (TSXV:CX) agreed to acquire Elkhart, Indiana-based TekModo, LLC. TekModo manufactures advanced composite panels for use in the recreational vehicle, bus, marine and commercial transportation vehicle industries. CarbonOne management cited TekModo’s manufacturing and marketing expertise and direct access to potential end users of CarbonOne’s products as ratio-nale for the acquisition. The announced transaction value was $6 million.
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD2015 YTD2016Domestic International
AutomotiveIQ
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Automotive Supplier Trading Multiples
Source: Capital IQ (as of June 30, 2016).(1) EV (“Enterprise Value”) is defined as market capitalization plus net debt, preferred equity and minority interest.(2) Median and mean values exclude all non-meaningful values.
80%85%90%95%
100%105%110%115%120%125%130%
Amherst Partners' Supplier Index S&P 500 Stock Index Source: Capital IQ. Left Axis: Index Value
Amherst Partners’ Automotive Supplier Index
Source: Capital IQ
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U.S. Total Vehicle Sales
Source: IHS
($ in millions) 06/30/16 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 14.48$ (6%) 1,108$ 2,231$ 3,903$ 567$ 17% 15% 2.0x 0.6x 3.9xBorgWarner Inc. 29.52 (23%) 6,424$ 8,698$ 8,308$ 1,395$ 21% 17% 1.6x 1.0x 6.2xCooper Tire & Rubber Co. 29.82 (19%) 1,645$ 1,553$ 2,959$ 578$ 24% 20% NM 0.5x 2.7xDana Holding Corporation 10.56 (25%) 1,562$ 2,436$ 5,901$ 592$ 14% 10% 1.3x 0.4x 4.1xFederal-Mogul Corp. 8.31 (16%) 1,405$ 4,404$ 7,481$ 617$ 15% 8% 4.6x 0.6x 7.1xGentex Corp. 15.45 (2%) 4,462$ 4,039$ 1,580$ 554$ 39% 35% NM 2.6x 7.3xGentherm Incorporated 34.25 (18%) 1,248$ 1,211$ 865$ 156$ 32% 18% NM 1.4x 7.7xGoodyear Tire & Rubber Co. 25.66 (22%) 6,824$ 12,048$ 16,110$ 2,363$ 27% 15% 2.1x 0.7x 5.1xHarman International Industries 71.82 (19%) 5,067$ 5,990$ 6,710$ 818$ 30% 12% 1.1x 0.9x 7.3xJohnson Controls Inc. 44.26 14% 28,697$ 36,507$ 36,317$ 3,265$ 18% 9% 2.5x 1.0x 11.2xLear Corp. 101.76 (8%) 7,507$ 8,372$ 18,353$ 1,732$ 11% 9% 0.4x 0.5x 4.8xMeritor, Inc. 7.20 (11%) 659$ 1,593$ 3,392$ 272$ 13% 8% 3.3x 0.5x 5.9xModine Manufacturing Co. 8.80 (20%) 417$ 514$ 1,353$ 111$ 17% 8% 0.8x 0.4x 4.6xShiloh Industries Inc. 7.29 42% 128$ 397$ 1,126$ 50$ 7% 4% 5.3x 0.4x 7.9xStandard Motor Products Inc. 39.78 15% 903$ 939$ 983$ 116$ 30% 12% 0.3x 1.0x 8.1xStoneridge Inc. 14.94 3% 416$ 502$ 645$ 55$ 28% 9% 1.3x 0.8x 9.1xSuperior Industries International 26.78 21% 680$ 634$ 740$ 95$ 13% 13% NM 0.9x 6.7xTenneco Inc. 46.61 (10%) 2,670$ 3,804$ 8,322$ 785$ 17% 9% 1.3x 0.5x 4.8xTesla Motors, Inc. 212.28 (8%) 31,264$ 33,229$ 4,253$ (360)$ 22% (8%) NM NM NMTower International, Inc. 20.58 (24%) 436$ 782$ 1,971$ 165$ 11% 8% 2.1x 0.4x 4.7x
Median(2) 18% 10% 1.6x 0.6x 6.2xMean 20% 12% 2.0x 0.8x 6.3x
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD2015 YTD2016Domestic International
Global OEM Aggregate Sales and EBITDA Margin
Amhers tPar tners .com
Supplier Index Median Net Debt/LTM EBITDA
Source: Capital IQ
Source: Capital IQ
AutomotiveIQ
Supplier Index Median Enterprise Value/LTM EBITDA
Source: Capital IQ
Global Automotive M&A Activity
Source: 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)
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$1,473.7 $1,658.4 $1,610.2
$1,293.9 $1,523.4
$1,638.9 $1,786.6 $1,815.1
$1,718.2 $1,760.8 $1834.9
9.0% 9.9% 7.4%
4.4% 9.9% 9.5% 9.4% 10.3% 10.2% 10.8% 10.8%
0%2%4%6%8%10%12%14%16%18%
$- $200 $400 $600 $800
$1,000 $1,200 $1,400 $1,600 $1,800 $2,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2 2016
In B
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Agg. Asian Sales Agg. European Sales Agg. North American Sales Total OEM EBITDA Margin
1.9x 1.9x 2.0x
1.5x
2.2x 2.0x
1.4x 1.6x 1.5x 1.6x
1.3x 1.7x
1.8x 1.8x 1.8x 1.5x 1.6x
1.3x
.0x
1.0x
2.0x
3.0x
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Chart Title: U.S. Supplier Index Median Net Debt/EBITDA Source: Capital IQ.
5.5x 5.0x 5.1x 5.5x 6.6x
7.7x 7.4x 7.2x 6.6x 7.2x 6.3x
7.5x 7.9x 7.1x
6.4x 6.1x 6.2x 6.1x
.0x
2.0x
4.0x
6.0x
8.0x
10.0x
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Chart Title: U.S. Supplier Index Median Enterprise Value/LTM EBITDA Source: Capital IQ.
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