NEW YORK (Reuters) -- Auto parts supplier Hilite International has hired Lazard Ltd. to solicit offers for the company in a sale that is expected to fetch up to $350 million, a source familiar with the situation told Reuters.
The Cleveland, Ohio-based company, which makes valves for automotive engines and transmissions, could draw interest from major auto parts suppliers such as BorgWarner Inc., Robert Bosch and DENSO Corp., as well as private equity firms, the source said.
Hilite, which emerged from bankruptcy in late 2009 under the control of creditors, is expected to seek initial offers for the company sometime in January, the source said, asking not to be named because the auction is not public.
The company, with annual sales of about $400 million, is expected to go for six to seven times its earnings before interest, taxes, depreciation and amortization (EBITDA) of $50 million, the source said.
Hilite manufactures automotive components and systems that reduce emissions and improve fuel efficiency at facilities in the United States and Germany.
Hilite's customers include General Motors Co., BMW AG, Daimler AG, Audi, Volkswagen and Honda Motor Co., as well as suppliers BorgWarner and Continental.
Representatives for Hilite could not be reached for comment. Lazard declined to comment.
Hilite is one of several auto parts suppliers expected to come up for sale or go public after emerging from bankruptcy with sharply lower costs and leaner balance sheets.
Hayes Lemmerz, the world's largest wheelmaker, which emerged from Chapter 11 bankruptcy a year ago, has also started discussions with financial advisers regarding strategic options including a sale of the company, three people familiar with the matter told Reuters separately.
Hayes Lemmerz, which has more than $100 million in annual EBITDA, according to one of the sources, could attract interest from Chinese and Indian auto parts suppliers in the event of a sale, the sources said. Representatives for Hayes Lemmerz could not be immediately reached for comment.
The catalyst for dealmaking in the auto industry next year is likely to come from suppliers that emerged from bankruptcy in the hands of creditors led by hedge funds, which would look to monetize those assets to take advantage of a recovery in auto sales, bankers have said.
"This would be one of the themes for 2011, a lot of the former bankrupt properties are now doing quite well, and the auto sector is back in favor. They will think that now is a time that I should think about monetizing my value," one banker said.
A year and a half after its landmark bankruptcy, GM raised $23.1 billion in November, making it the world's largest initial public offering and boding well for several IPOs expected next year by auto companies, including Chrysler and Delphi.