transportation & logistics - harriswilliams.com · 9/7/2017* bosch mahle turbo systems ......
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TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
www.harriswilliams.com
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
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www.harriswilliams.com
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
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CONTENTS
M&A TRANSACTIONS
PUBLIC MARKETS OVERVIEW
STOCK PRICE PERFORMANCE
OUR GROUP
CONTACTS
UNITED STATES
Frank MountcastleManaging [email protected]+1 (804) 915-0124
Jason BassManaging [email protected]+1 (804) 915-0132
Joe ConnerManaging Director [email protected]+1 (804) 915-0151
Jershon JonesDirector [email protected]+1 (804) 932-1356
Jeff BurkettDirector [email protected] +1 (804) 932-1334
Jeff KiddVice President [email protected] +1 (804) 915-0178
James O’MalleyVice President [email protected]+1 (804) 915-0165
EUROPE
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
When it comes to delivering the right part, as soon as it’s needed,aftermarket suppliers serving the heavy-duty equipment industry havelagged behind those serving the automotive and light-duty sectors—butthe gap is narrowing thanks to better distribution networks and inventorymanagement technology.
“In the truck parts business, the supply chains are just not as efficient asthey are in the auto space. The auto retailers and the auto chains aremuch further along in their ability to deliver a broad range of productsmore rapidly,” says FleetPride Chief Merchandising Officer RobertSammons.
Trailer-Body Builders
HEAVY-DUTY AFTERMARKET CHAIN BUILDS ON AUTOMOTIVE PARTS MODEL
The Automotive Aftermarket Suppliers Association (AASA) has releasedresults of a recent survey that shows many AASA supplier members believethat the electrification of vehicles will impact their businesses within thenext 10 years. Of those expecting an impact, the majority reported thatthey expect the impact to be negative. This is according to the results ofthe AASA’s Q3 2017 Supplier Barometer survey. “Although the majority ofAASA Barometer survey respondents are concerned about the impactfrom electrified vehicles, the majority also report preparations areunderway to respond to new market demands,” said Bill Long, AASApresident and chief operating officer.
Aftermarket News
SUPPLIERS EXPECT SIGNIFICANT ELECTRIC VEHICLE IMPACT IN NEAR FUTURE
SELF-DRIVING TRUCKS MAY BE CLOSER THAN THEY APPEAR
Trucks will someday drive themselves out of warehouses and cruise downfreeways without the aid of humans or even a driver’s cab — about thatthere seems little disagreement. The question is how soon that day getshere. And while the answers vary — technologists, not surprisingly, aremore bullish than truckers — billions of dollars and a growing parade ofcompanies, from tiny start-ups to the country’s biggest truckingoperations, are betting it will be here sooner than most people think. Thisyear, companies and investors are on pace to put just over $1 billion intoself-driving and other trucking technologies, 10 times the level of threeyears ago, according to CB Insights, which tracks the venture capitalindustry.
New York Times
WHAT WE’RE READING
AUTO AFTERMARKET GROWING, BUT FACING NEW CHALLENGES
The U.S. automotive aftermarket continues to experience growth and isexpected to generate $318 billion in revenue this year, according toindustry officials. Auto Care Association President and CEO Bill Hanveyand Automotive Aftermarket Suppliers Association President and COO BillLong offered an overview of the aftermarket in relation to the growth intelematics and autonomous vehicle development. The two associationexecutives touted that the aftermarket is the third largest employerbehind the health care and construction industries. By 2020, the industry isexpected to reach $421 billion in sales. But the industry faces challengesfrom new companies and developing technologies, includingautonomous vehicles.
Tire Business
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M&A TRANSACTIONS(1,2,3)
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TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
*Denotes pending transactions
RECENT M&A TRANSACTIONS
Date Target Business Description Acquirer
11/17/2017 Good Roads Auto Systems Distributes wheels and tires across the east coast TSW Alloy Wheels
11/13/2017 MotoStar Tire & Auto Products Wholesale distribution of motor vehicle supplies, accessories, tools, and
equipment
K&M Tire
11/6/2017 FullSpeed Automotive Franchisor of automotive oil change centers CenterOak Partners
11/2/2017 Argus Cyber Security Prov ides comprehensive automotive cyber security solutions Elektrobit Automotive
11/2/2017 Speedco National network of serv ice locations that prov ides quick lube and
inspection serv ices to the trucking industry
Love's Travel Stops &
Country Stores
11/1/2017 Warn Industries Designs, manufactures, and markets vehicle equipment and
accessories
LKQ Corp.
10/17/2017* Omix-ADA World's largest independent developer and supplier of Jeep and off-
road parts, accessories, and floor liners
Truck Hero, Inc.
10/11/2017 Dallas Serv ice Center, Inc. Prov ides truck repair serv ices in the Dallas-Fort Worth area Ryder System, Inc.
10/9/2017 DRB Holdings Prov ides technology products to the car wash industry New Mountain Capital
10/3/2017 Hy-Per Lube Corporation Manufactures high-performance additives Bar's Products
10/2/2017 American Driveline Systems, Inc. Offers automotive aftermarket franchising serv ices through its
subsidiaries
Icahn Enterprises LP
9/25/2017 Alliance Automotive Group Leading European distributor of vehicle parts, tools, and workshop
equipment
Genuine Parts Co.
9/13/2017 Newpark Auto Serv ice Provides auto serv ice and repairs Icahn Associates Holding
LLC
9/11/2017 DuraFit Brand of OEM replacement diesel particulate filters (DPFs) and diesel
oxidation catalysts (DOCs)
APC Automotive
Technologies
9/7/2017* Bosch Mahle Turbo Systems
GmbH & Co. KG
Manufactures and distributes exhaust gas turbochargers for passenger
cars and commercial vehicles
Fountainvest Partners (Asia)
Ltd.
9/5/2017 Rack Attack Retails automotive racks and hitches Connor, Clark & Lunn
Financial Group Ltd.
9/5/2017 Rolling Big Power (RBP) Premium truck accessories lifestyle brand Pilot Inc.
9/4/2017 Klapper Autoteile GmbH & Co.
KG
Full-line automotive parts wholesaler and distributor Alliance Automotive Group
SAS
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PUBLIC MARKETS OVERVIEW(1)
3
TRANSPORTATION & LOGISTICS
TEV / LTM EBITDA TEV / 2017P EBITDA
AVERAGE REVENUE GROWTH (2013 – 2016) AVERAGE REVENUE GROWTH (2016 – 2018P)
AVERAGE EBITDA GROWTH (2013 – 2016) AVERAGE EBITDA GROWTH (2016 – 2018P)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
8.2x
10.1x
11.2x
12.1x
Suppliers
Vehicle Manufacturers
Distributors and Retailers
Dealerships and Services
Providers
8.0x
10.2x
10.4x
12.0x
Suppliers
Distributors and Retailers
Vehicle Manufacturers
Dealerships and Services
Providers
(1.1%)
0.1%
6.2%
11.2%
Vehicle Manufacturers
Suppliers
Distributors and Retailers
Dealerships and Services
Providers
2.0%
6.3%
6.3%
6.9%
Vehicle Manufacturers
Dealerships and Services
Providers
Suppliers
Distributors and Retailers
2.6%
4.6%
11.1%
12.0%
Vehicle Manufacturers
Suppliers
Distributors and Retailers
Dealerships and Services
Providers
1.2%
9.1%
9.2%
10.2%
Vehicle Manufacturers
Suppliers
Dealerships and Services
Providers
Distributors and Retailers
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STOCK PRICE PERFORMANCE(1)
4
TRANSPORTATION & LOGISTICS
(Indexed to November 11th, 2016)
TRAILING TWELVE MONTHS
MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
(6.1%)
(1.0%)
(0.9%)
(0.3%)
1.0%
Suppliers
Dealerships and
Service Providers
Vehicle
Manufacturers
Distributors and
Retailers
S&P 500
(12.4%)
0.2%
14.1%
17.4%
19.1%
Distributors and
Retailers
Suppliers
Dealerships and
Service Providers
Vehicle
Manufacturers
S&P 500
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
30%
Nov-16 Feb-17 May-17 Aug-17 Nov-17
Suppliers Distributors and Retailers
Dealerships and Service Providers Vehicle Manufacturers
S&P 500 Index
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OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marineand air transportation, transportation equipment, and the automotive and heavy duty vehicle market.
TRANSPORTATION & LOGISTICS
RECENTLY CLOSED T&L TRANSACTIONS
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AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
DEEP EXPERIENCE ACROSS T&L SECTORS
MARINE TRANSPORTATION
NICHE TRANSPORTATION
TRANSPORTATION EQUIPMENT
RAIL & RAIL SERVICES
AUTOMOTIVE & HEAVY DUTY
VEHICLE
THIRD-PARTY LOGISTICS
AIR TRANSPORTATION
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has been acquired byhas merged with
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Energy, Power& Infrastructure
IndustrialsHealthcare & Life Sciences
Transportation & Logistics
Aerospace, Defense & Government
Services
Business Services
Building Products & Materials
Technology, Media & Telecom
Specialty Distribution
Consumer
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Transportation & Logistics
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries.
OUR FIRM
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017
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TRANSPORTATION & LOGISTICS
SOURCES
TRANSPORTATION & LOGISTICS
1. FactSet.
2. MergerMarket.
3. Pitchbook.
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
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DISCLOSURES
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AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2017