Aug 3 2015
Sensata Technologies Holding N.V. announced today that it has reached an agreement to acquire the sensing portfolio of Custom Sensors & Technologies, Inc. ("CST") for a total enterprise value of $1.0 billion.
The acquisition includes the Kavlico, BEI, Crydom and Newall product lines and brands and includes sales, engineering and manufacturing sites in the United States, the United Kingdom, Germany, France, China and Mexico that employ approximately 2,500 people, including approximately 250 engineers. Revenue for the business being acquired was approximately $320 million during the last 12 months. The transaction is subject to customary regulatory approvals and is expected to close in the fourth quarter of 2015 or early 2016.
Kavlico is a significant provider of mission-critical linear and rotary position sensors to aerospace OEMs and Tier One suppliers and pressure sensors to the general industrial and HVOR markets. BEI provides harsh environment position sensors, optical and magnetic encoders and motion control sensors to the industrial, aerospace, agricultural and medical device markets. Crydom manufactures solid state relays for power control applications in industrial markets. Newall provides encoders and digital readouts to machinery and machine tool markets.
"The acquisition of CST's sensing portfolio is in line with Sensata's strategy to Win in Sensing. This acquisition further extends our sensing content beyond automotive markets and builds scale in pressure sensing," said Martha Sullivan, Sensata Technologies President and Chief Executive Officer. "These are long-standing sensing brands that are well respected by leading OEMs. We are excited to welcome this talented team into Sensata's global organization."
"On a stand-alone basis, this is a profitable and highly cash generative business with EBITDA margins of approximately 26% and Sensata brings significant, value-creating synergies," added Paul Vasington, Sensata Technologies Chief Financial Officer. "Including interest and integration expenses, we expect this acquisition to be breakeven to adjusted net income in the first full year and to be $0.23 to $0.26 accretive to adjusted net income per diluted share in the third year."
Bank of America Merrill Lynch has committed to provide debt financing to support the transaction. Lazard acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to Sensata Technologies.
Conference Call
Sensata Technologies will conduct a conference call today at 8:00 AM eastern time to discuss this transaction. The U.S. dial in number is 877-486-0682 FREE and the non-U.S. dial in number is 706-634-5536 FREE. The passcode is 1172100. A live webcast and a replay of the conference call will also be available on the investor relations page of the Company's website at http://investors.sensata.com.
Source: http://www.sensata.com/