TI Automotive to be acquired by Bain for $2.4 billion, report says
DETROIT (Bloomberg) -- Global fuel systems supplier TI Automotive Ltd., after months of wrangling and speculation, said today it has agreed to be acquired by private equity firm Bain Capital LLC.
Terms of today's deal were not disclosed, but sources told Bloomberg the deal is valued at $2.4 billion.
Bain has agreed to pay about six times earnings before interest, taxes, depreciation and amortization (known in financial terms as Ebitda), said the people, who asked not to be identified revealing private information. TI’s Ebitda is about $400 million, giving the company a sale price of around $2.4 billion, they said.
Talks between Bain and TI have been going on for more than a year, with the two sides trying to finalize a deal last January valuing TI at more than the $2 billion, Bloomberg reported. But the hedge funds that own TI last year delayed a vote on the sale to Bain to weigh a rival bid of roughly $2 billion from Pamplona Capital Management LLP, people with knowledge of the matter said at the time.
Eventually, the hedge funds that own TI -- led by Oaktree and Duquesne Capital Management LLC -- voted against a sale last year because they wanted a higher price, the people said.
The existing management team, including CEO Bill Kozyra, will continue to lead the company and no changes will occur operationally, said Frank Buscemi, global communications director for TI Automotive, based in suburban Detroit.
A source familiar with the deal told Crain’s Detroit Business, an affiliate of Automotive News, that Kozyra had a troubled relationship with Oaktree and other owners on the company's board and the deal “is likely a sigh of relief” for TI's boss.
Buscemi declined to comment on the matter.
The deal is subject to approval by TI Automotive shareholders. Closing is expected in mid-2015, the company said.
“We are excited that 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,” Kozyra said in a statement today. “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.”
The company said in today's statement that a substantial majority of investors have pledged to support the deal, which is still pending regulatory review and other customary closing conditions.
TI, which once supplied fuel lines to Ford Motor Co.’s Model T, traces its roots to 1919. The company, chartered in Britain with a headquarters in Auburn Hills, Mich., was bought by Oaktree and Duquesne Capital in a 2007 debt restructuring.
It generated about $3 billion in revenue in 2013, with more than one-fourth coming from North America, people familiar with the situation have said.
Bain manages about $80 billion in assets, according to its website. Its investments include Texas-based specialty retailer Michaels Stores Inc. and German auto-parts maker FTE Automotive GmbH.
Dustin Walsh of Crain's Detroit Business contributed to this report.
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