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AutomotiveIQ
Summary of M&A and Capital Markets Activity in the Automotive Industry Amhers tPar tners .com
Fourth Quarter 2017
July 3, 2017 - Elkhart, Indiana-based Lippert Components Inc. acquired Italy-based Metallarte srl. Metallarte manufactures entry and compartment doors for producers of leisure vehicles. Lippert management cited access to the European RV supplier market as a key driver for this acquisition. The announced transaction value was $17 million.
July 25, 2017 - Cedar Rapids, Iowa-based Folience Inc. acquired Sumner, Iowa-based Life Line Emergency Vehicles Inc. Life Line manufactures ambulances. Folience management cited the mutual interest in a combined employee-owned (ESOP) company and product diversification as key drivers in the transaction. The finan-cial terms of the transaction were not disclosed.
August 1, 2017 - Southfield, Michigan-based Methode Electronics Inc. (NYSE:MEI) acquired Canada-based Pacific Insight Electronics Corp. (TSX:PIH). Pacific Insight manufactures LED system products, indirect and direct lighting systems, and other electronic control modules for OEMs in the commercial, automotive, and specialty vehicle markets. Methode management cited the complemen-tary nature of the companies’ products and expertise and Pacific Insight’s innovation and technology in LED-based ambient and direct lighting as key drivers for the acquisition. The announced transaction value was $110 million, which implies revenue and EBITDA multiples of 1.1x and 9.4x, respectively. August 2, 2017 - Japan-based S.D.L Driven Performance Brands acquired Opelika, Alabama-based APR LLC. APR provides engi-neered aftermarket performance products such as cylinder heads, engine internals, diverter valves, intake manifolds, motor mounts, valve train, gauges, and induction plumbing. Driven management noted APR’s products are highly complementary to Driven’s brand. The financial terms of the transaction were not disclosed.
August 17, 2017 - Eastlake, Ohio-based US Lighting Group Inc. (OTCPK:USLG) acquired Eastlake, Ohio-based Intellitronix Corp. Intellitronix manufactures automotive accessories. US Lighting management cited Intellitronix’ expertise in LED digital instruments and automotive and custom electronics as key drivers for this acquisition. The announced transaction value was $4 million.
August 30, 2017 - Germany-based Schaeffler India Limited (BSE:505790) announced an agreement to acquire India-based Luk India Pvt. Ltd. Luk manufactures clutch, transmission compo-nents, and systems for automotive applications. Schaeffler man-agement cited cost and supply-side efficiencies as key drivers for the acquisition. The announced transaction value was $417 million, which implies revenue and EBITDA multiples of 3.7x and 21.2x, respectively. October 3, 2017 - Private equity group KV Private Equity Inc. acquired Canada-based Off Grid Trailers. Off Grid Trailers manu-factures rugged off-road expedition and teardrop trailers. KV man-agement noted Off Grid’s product line complements KV’s recent investment in similar companies. The financial terms of the transac-tion were not disclosed.
Recent Deal Activity Q3/Q4 2017
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October 17, 2017 - Ann Arbor, Michigan-based SF Motors Inc. acquired Redwood City, California-based InEvit Inc. InEvit manufac-tures slide-in battery modules for electric vehicles. SF management noted InEVit’s expertise, patented chassis technologies, and manu-facturing resources will be leveraged to help scale its e-powertrain production. The announced transaction value was $33 million.
October 27, 2017 - Colmar, Pennsylvania-based Dorman Products Inc. (NasdaqGS:DORM) acquired Canada-based MAS Automotive Distribution Inc. MAS manufactures chassis, steering, suspen-sion, and alignment components for the automotive aftermarket throughout North America. MAS’s chassis and control arms comple-ment Dorman’s product lines and increases the combined compa-nies’ leadership position in the aftermarket chassis and suspension markets. The financial terms of the transaction were not disclosed.
November 1, 2017 - Private equity group Mosaic Capital Corporation (TSXV:M) acquired Canada-based Circle 5 Tool and Mold LP. Circle 5 provides injection molded solutions to the automotive and non-automotive industry. Circle 5 management noted its succession issues and organic and acquisition growth opportunities as key drivers for the transaction. The financial terms of the transaction were not disclosed.
November 23, 2017 - China-based Zhejiang VIE Science & Technology Co. Ltd. (SZSE:002590) announced an agreement to acquire Richmond, Virginia-based Evatran LLC. Evatran manu-factures Plugless L2 wireless electric vehicle charging systems. Zhejiang management cited Evatran’s wireless technology as rationale for the acquisition. The announced transaction value was $10.5 million, which implies revenue and EBIT multiples of 1.8x and 7.8x, respectively.
December 14, 2017 - Troy, Michigan-based Horizon Global Corporation (NYSE:HZN) announced an agreement to acquire Netherlands-based Brink Group B.V. Brink manufactures tow-ing systems. Horizon management cited Brink’s product portfolio and manufacturing expertise as rationale for the acquisition. The announced transaction value was $200 million which implies a revenue multiple of 1.3x.
December 14, 2017 – Livonia, Michigan-based Deshler Group acquired Ferndale, Michigan-based Uni-Bond Brake LLC. Uni-Bond manufactures brake components for automotive and heavy duty applications. Deshler management cited Uni-Bond’s product reliability and aftermarket focus as key drivers for the acquisition. The announced transaction value was $3 million which implies a revenue multiple of 0.2x.
December 18, 2017 - China-based Zhejiang Kandi Vehicles Co., Ltd. announced an agreement to acquire China-based Jinhua An Kao Power Technology Co. Ltd. Jinhua manufactures electric car batteries and charging systems. Zhejiang management cited Jinhua’s electric car battery replacement technologies as a means to strengthen Kandi’s EV battery exchange offerings as the key driv-er for the acquisition. The announced transaction was $45 million.
70%80%90%
100%110%120%130%140%150%160%170%
Amherst Partners' Supplier Index S&P 500 Stock Index
Source: Capital IQ.
Left Axis: Index Value
($ in millions) 12/31/17 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 15.80$ (10%) 1,761$ 2,803$ 4,029$ 643$ 19% 16% 1.6x 0.7x 4.4xBorgWarner Inc. 45.93 (10%) 9,728$ 11,741$ 9,209$ 1,536$ 22% 17% 1.3x 1.3x 7.6xCooper Tire & Rubber Co. 38.78 4% 2,080$ 2,084$ 2,918$ 553$ 23% 19% NM 0.7x 3.8xDana Holding Corporation 23.45 (16%) 3,391$ 4,922$ 6,078$ 668$ 15% 11% 2.1x 0.8x 7.4xGentex Corp. 17.36 (12%) 4,987$ 4,231$ 1,746$ 616$ 39% 35% NM 2.4x 6.9xGentherm Incorporated 39.50 6% 1,450$ 1,479$ 951$ 158$ 33% 17% 0.2x 1.6x 9.4xGoodyear Tire & Rubber Co. 35.67 7% 9,022$ 14,221$ 15,166$ 2,497$ 27% 16% 2.0x 0.9x 5.7xJohnson Controls Inc. 43.65 8% 41,446$ 55,491$ 42,598$ 3,996$ 22% 9% 3.3x 1.3x 13.9xLear Corp. 150.68 (13%) 10,056$ 10,881$ 19,292$ 1,929$ 12% 10% 0.4x 0.6x 5.6xMeritor, Inc. 17.88 (31%) 1,598$ 2,487$ 3,074$ 248$ 14% 8% 3.5x 0.8x 10.0xModine Manufacturing Co. 16.58 (14%) 831$ 1,311$ 1,503$ 126$ 17% 8% 3.8x 0.9x 10.4xShiloh Industries Inc. 8.35 (20%) 194$ 430$ 1,051$ 70$ 11% 7% 3.4x 0.4x 6.2xStandard Motor Products Inc. 52.84 10% 1,197$ 1,264$ 1,102$ 149$ 30% 14% 0.4x 1.1x 8.5xStoneridge Inc. 15.68 (21%) 443$ 568$ 738$ 80$ 29% 11% 1.4x 0.8x 7.1xSuperior Industries International 20.23 21% 506$ 476$ 721$ 81$ 11% 11% NM 0.7x 5.9xTenneco Inc. 58.66 (3%) 3,184$ 4,473$ 8,755$ 768$ 17% 9% 1.5x 0.5x 5.8xTower International, Inc. 22.65 (17%) 459$ 876$ 1,907$ 186$ 12% 10% 2.0x 0.5x 4.7x
Median(2) 19% 11% 1.8x 0.8x 6.9xMean 21% 13% 1.9x 0.9x 7.3x
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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
e
U.S. Total Vehicle Sales
Source: IHS
Source: Capital IQ (as of December 31, 2017)
10.4 11.6
12.7 14.4
15.516.4
17.8 17.8
.00.0
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 2017
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)
$1,503.4 $1,619.2
$1,766.2 $1,797.4 $1,703.2 $1,798.4 $1,742.6 $1,811.0
9.9% 9.5% 9.4% 10.3% 9.8% 10.2% 10.7% 10.8%
0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%
$- $200 $400 $600 $800
$1,000 $1,200 $1,400 $1,600 $1,800 $2,000
2010 2011 2012 2013 2014 2015 2016 2017
Agg. Asian Sales Agg. European Sales Agg. North American Sales Total OEM EBITDA Margin
95 91 90 100 88 105 91 86
63
192 213
257 245
190 217 227
268 272
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014 2015 2016 2017Domestic 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 1.8x 1.8x
.0x
1.0x
2.0x
3.0x
Chart Title: U.S. Supplier Index Median Net Debt/EBITDA
Source: Capital IQ.
Global OEM Aggregate Sales and EBITDA Margin
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Supplier Index - Median Net Debt/LTM EBITDA
Source: Capital IQ
AutomotiveIQ
Supplier Index - Median Enterprise Value/LTM EBITDA
Source: Capital IQ
Global Automotive M&A Activity
Tota
l Tra
nsa
ctio
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olu
me
(#
)
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 6.9x 6.9x
.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.
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Contact Us Don Luciani, Partner Head of Automotive [email protected]
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Scott Eisenberg, [email protected]
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Matthew Feldman, [email protected]
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