Private-equity firm Bain Capital LLC signed a definitive agreement to buy TI Automotive, the latest in a series of deals in the automotive supply chain.
Financial terms weren’t disclosed, although Bain is said to be paying $2.1 billion, according to two people familiar with the deal. A TI spokesman declined to comment on the purchase price.
TI’s current management team will continue to lead the company.
“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,” TI Chief Executive Bill Kozyra said in a statement Tuesday.
The move highlights the continuing acquisition activity within the financially health auto-supplier industry. Flush with cash, many companies are looking for buyout targets to bolster their business.
Last year, ZF Friedrichshafen AG of Germany agreed to acquire U.S. rival TRW Automotive Holdings Corp. for about $11.7 billion to create the world’s second-largest automotive supplier by sales. Meanwhile, automotive seat maker Lear Corp. announced a deal to buy automotive leather maker Eagle Ottawa LLC in a deal valued at $850 million..
TI said the transaction has financing in place, and that the deal is subject to approval by shareholders although a substantial majority of which have pledged to support the deal. The acquisition is expected to close in mid-2015.
TI, which has its corporate headquarters in Auburn Hills, Mich., and its financial offices in Oxford, U.K., operates 130 facilities in 29 countries, supplying auto makers with a variety of parts, including the tube and hose assemblies used in a vehicle’s heating, ventilation and air-conditioning system.
Reports have swirled over the years that TI would be bought out, the most recent coming last year when Cooper-Standard Holdings Inc. was said to be weighing a merger with TI, since both are in the business of building automotive-fluid systems. Bain had made an offer to buy TI Automotive at that time but was turned down.
TI Automotive was acquired in 2007 by a consortium of private-equity funds led by Oaktree Capital Group LLC and Duquesne Capital Management LLC. TI’s roots can be traced back to 1919 with the starting of the company Tube Investments, which later became TI Group PLC—comprised of three operations serving both the automotive and aerospace industry.
London-based Smiths Group bought TI Group in 2000 and spun off the automotive business into a new company named TI Automotive in July 2001.
Weil Gotshal & Manges LLP is serving as legal counsel to TI Automotive, while Blackstone Advisory Partners is serving as financial adviser and Latham & Watkins LLP is serving as legal counsel to an ad hoc group of shareholders.
Goldman Sachs & Co. and UBS Securities LLC are serving as financial advisers to Bain Capital. Ropes & Gray is serving as legal counsel, and PricewaterhouseCoopers is serving as accounting adviser.