Private Equity Firms Drive Away With More Auto Parts Deals - aftermarketNews

Private Equity Firms Drive Away With More Auto Parts Deals

The auto parts industry continues to be one of the favorite places for private equity firms to put their money as they invested more than $1.5 billion in the industry in July.

From The auto parts industry continues to be one of the favorite places for private equity firms to put their money as they invested more than $1.5 billion in the industry in July.

The summer’s largest leveraged buyout of an autoparts maker came courtesy of Cypress Group, which won a hotly contested auction for Dana Corp.’s replacement auto parts business.

Cypress agreed to acquire the Toledo, Ohio-based company’s Automotive Aftermarket Group for $1.1 billion in cash. On the block since December, Automotive Aftermarket Group sells brakes, filters, steering and suspension components. Its brands include Raybestos brakes and Wix filters. The unit racked up $2 billion of sales in 2003.

Dana, which turned down an $18 per share hostile bid for the company by rival ArvinMeritor in November, plans to reinvest in its core businesses, contribute to its pension plans and to retire some of its $1.8 billion in debt with the proceeds.

The most recent deal in the sector was Cerberus Capital Management LP’s buyout of GenCorp Inc.’s GDX Automotive business. New York-based Cerberus picked up the struggling unit for $147 million in cash.

GDX, which sells parts for Chryslers, Toyotas, Peugeots, Renaults and Fiats and other cars, made only $8 million in 2003, down from $32 million the year before. It slipped into the red in the first quarter of 2004 because of price pressure and lower volumes, losing $14 million compared with $5 million of profit booked in the same quarter last year.

July started with Thomas H. Lee Partners announcing an agreement to acquire Canadian auto parts maker Progressive Moulded Products Ltd. in a secondary buyout from Oak Hill Capital Partners.

While terms of the deal weren’t released, Wall Street sources put the deal’s value at more than $528 million based on recent acquisition multiples for auto-parts makers. Toronto-based Progressive makes plastic automobile interior subsystems, and is expected to generate about $75 million of Ebitda on sales of about $376 million, according to those same sources.

Dealmaking in the industry isn’t likely to slow down in August either, as there are many other automotive assets still on the auction block.

Other companies currently being sold include Honsel International Technologies Holdings Sarl, a portfolio company of Carlyle Group. The Washington D.C. private equity firm is expected to get more than $700 million for the European cast-aluminum engine block maker.

Also recently sold, Stanadyne Automotive Corp., owned by New York’s American Industrial Partners. The Windsor, Conn.-based maker of diesel and gas engine components was sold to private equity firm Kohlberg & Co., for approximately $330 million.

And following up on its $1.1 billion deal to buy Dana’s replacement auto parts business, Cypress is a favorite to win the auction for Ohio-based Cooper Tire and Rubber Co.’s Cooper-Standard Automotive Group division. The maker of door and window seals, transmission system tubes and valves and other components for the Big Three automakers, could carry a price tag of more than $1 billion.

Although Cooper-Standard accounted for $1.66 billion, almost half of Cooper Tire’s $3.5 billion in 2003 sales, the auction hasn’t been as fierce as the one for Dana. Dimming enthusiasm for the auction is the company’s dependence on sales to Ford Motor Co., DaimlerChrysler AG and General Motors Corp. The three auto makers account for about 70 percent of the company’s sales.

Copyright 2004, The Deal, LLC. All Rights Reserved.


Click here to view the rest of today’s headlines.

You May Also Like

Epicor Unveils Digital Cataloging, Future Plans

The new catalogs use Epicor-validated, ACES-compliant data and an “Intelligent Search” feature to find the right part quickly.

Epicor digital catalog

Epicor introduced two cloud-based versions of its digital cataloging tool-- Epicor Catalog for Automotive-- at the 2023 AAPEX Show that will be available for parts distributors and service/'repair dealers in the US and Canada come February.

The new, standalone catalogs include Epicor-validated, ACES-compliant data and a new “Intelligent Search” feature that enables users to quickly find the right parts for virtually any vehicle repair, the company said. In addition, all part and application content in the catalog for its Mexico customers is in Spanish, enabling users to save time and eliminate lookup errors.

Epicor Launches Automotive B2B eCommerce Platform

The Epicor Commerce for Automotive platform features multi-seller support and parts lookups for distributors and their customers.

Epicor commerce for Automotive
Marelli Launches Fuel System for Hydrogen Propulsion Systems

Marelli will present a variety of new technology at the CTI Symposium in Germany, Dec. 5-6.

The Automotive Aftermarket’s Role in a Circular Economy 

Take a deep dive into the factors driving the automotive aftermarket toward a more circular economy.

Circular economy
AI in the Aftermarket: Endless Applications Yet Hurdles Remain

The automotive aftermarket is delving into AI and ways it can help businesses be more productive and effective.

Other Posts

Intellias to Showcase HMI, ADAS and More at CES 2024

The company also will unveil the next generation of its IntelliKit, a portable fully-integrated digital cockpit.

Anyline Partners with Treads to Simplify Car Ownership

Anyline has partnered with Treads, an AI-driven car management subscription service, to enhance analytics for car owners.

Anyline Trends partnership
Unifying Your Parts Technology to Eliminate Channel Conflict

Harmonizing various channels in your eCommerce strategy through unified technology helps build an agile business model.

ecommerce channel conflict auto parts suppliers
Opus IVS Achieves 100+ Patents Pending

The company will demonstrate its patented technologies at the 2023 SEMA Show.