Monday, 12 January 2015

Bain stalks TI Automotive

TI Automotive, one of the biggest but most elusive and low-profile names in the UK automotive components manufacturing sector, is being stalked by US buyout firm Bain Capital.

A deal for the Oxford-based business could be worth more than £1.2 billion. If the deal goes through then previous shareholders of the company will be more than a little intrigued.

Founded in 1919 as Tube Investments Ltd., in Birmingham, England, the company was one of the engineering stalwarts of British industry in the 1970s, principally as a steel tube maker. The company always maintained a high public profile.

It later became TI Automotive and expanded its business steadily through a series of acquisitions and mergers.

But the most interesting period of its life occurred in 2000 and 2001. In 2000, parent company TI Group ‘merged’ with Smiths Industries Ltd to form Smiths Group plc. Then, curiously, mysteriously and strangely a year later, TI Automotive was created following a ‘demerger’ from Smiths Group. But shareholders missed out completely on the deal.

Today, the company claims that the innovative technology, processes and products of leading businesses it has acquired over the years, including Bundy, Walbro and Marwal, have been “deeply integrated” into TI Automotive

Consequently, TI Automotive makes a range of products under various classifications including fluid carrying systems, powertrain systems, tank systems, pumps and modules, HVAC fluid systems and aftermarket.

The company has about 23,000 employees spread around the world and supplies most if not all major car companies including Audi, Bentley, Ford, Honda, and JaguarLandRover.

Considering it has such a large footprint in terms of employees, turnover and strategic level of customer importance, the company has an amazingly low profile, almost to the point that it seems not to exist.

Many manufacturing companies are keen to promote their technology achievements and financial performance to demonstrate their prowess, but in both of these areas TI Automotive is strangely silent and keeps its PR mouth firmly shut.

However, if Bain Capital does succeed in making a purchase of this company, legal and financial consultants employed to investigate ‘the books’ can expect to will spend many hours in the due diligence process.

The company is currently controlled by Oaktree Capital which has made a complete success of securing TI Automotive’s public anonymity.

Interestingly, Bain Capital has made two previous attempts to purchase TI Automotive – so it must be keen to secure the assets – and the income. There must be something interesting about TI automotive that Bain capital’s executives have spotted. Will it be a case of third time lucky?

Bain Capital is most noteworthy for its acquisition of Ibstock, one of Britain’s biggest household brick makers in a £414 million buyout from CRH. 

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