Tuesday, 27 January 2015

TI Automotive bought by Bain

TI Automotive, a leading provider of fluid storage, carrying and delivery systems to automotive manufacturers, is to be acquired by Bain Capital, a leading global private investment firm.

The existing management team will continue to lead the company. Financial terms of the private transaction were not disclosed.

Headquartered in Auburn Hills, Michigan and with facilities in 29 countries in all key markets, TI Automotive is a highly diversified automotive supplier with leading market positions across its product lines - see also autoindustrynewsletter.blogspot.co.uk, 12 January 2015.

TI Automotive has a broad yet exclusive focus on vehicle fluid management, and major global product areas include fluid carrying systems, tank systems, pump and module systems, HVAC fluid systems, and powertrain components.

“We are excited Bain Capital will invest in TI Automotive to grow the business and to enable our team to focus solely on what we do best - manufacturing high quality, safety critical fluid systems for our customers,” said Bill Kozyra, TI Automotive president, chief executive officer and chairman of the board, who will continue in his current roles.

“Bain Capital brings to TI Automotive a deep understanding of our business and a well-known track record of global success in the automotive industry, and we look forward to partnering with them,” he added."

TI Automotive is a market leading company that serves its customers’ needs extraordinarily well, through a combination of innovative engineering, extensive experience, and a very strong commitment to quality,” said Todd Cook, a managing director at Bain Capital. “We look forward to partnering with Bill and the TI management team to support them in their next phase of growth.”

The transaction has committed financing in place and is not subject to a financing condition. The deal is subject to approval from TI Automotive shareholders, a substantial majority of which have pledged to support the deal. Closing is expected in mid-2015, pending regulatory review and other customary closing conditions.

COMMENT. It is quite amazing in this day and age of freedom of information and almost universal access to information, that an acquisition the size if TI Automotive can pass by without the release if any financial details.

TI Automotive, with a workforce of some 23,000 declared employees, is roughly half the size of GKN plc, the aerospace and automotive company with roughly 50,000 employees.

In 2014, GKN had a sales turnover of £3,828 million (or £3.828 billion) and an operating profit of £300 million.

These figures equate to a sales turnover of £76,560 per head and an operating profit of £6,000 per head.

It is not unusual for an engineering company to achieves sales/head of £100,000 or more.

Applying these figures to TI Automotive would suggest the company had a turnover of £1.76 billion and an operating profit of £138 million.

Bearing in mind the size of the numbers involve in Bain Capital's latest acquisition, it is quite amazing the venture capital should throw a cloak of secrecy around its figures.

Venture capital companies make their money buying and selling businesses, witness the acquisition of UK van maker LDV by Sun Capital only later to be sold on heartlessly to GAZ in Russia. Usually, venture capital companies have no interest in the companies they buy and sell beyond the profit they can make from them.                                                JM

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