PARIS (Bloomberg) — Delphi agreed to buy the HellermannTyton Group for 1.07 billion pounds ($1.7 billion) to add cabling gear used in cars.
in Automotive News Europe, 30-07-2015
HellermannTyton, a UK supplier, manufactures ties, insulation and protection systems for cables in cars. The acquisition will help Delphi capitalize on growing demand for cars that connect to the Internet, mobile phones and other devices, Delphi said.
“With consumers now demanding more connectivity in their vehicles, electrical architecture is the enabler to that added vehicle content,” said Kevin Clark, Delphi’s CEO.
Delphi also said it bought a maker of automated-driving software and took a stake in a company whose technology helps cars avoid objects.
“Delphi continues to be focused on the car of the future,” said Chris McNally, an analyst at Evercore ISI in London. “It’s leading this charge into the connected cars space.”
Delphi is based in Gillingham, England, and run from Detroit. The company moved its domicile to the UK, where corporate tax rates are lower, in the wake of the U.S. government’s 2009 bailout of the auto industry.
HellermannTyton traces its roots to manufacturers founded in Germany and the UK in the 1930s. Doughty Hanson & Co., a UK private-equity firm, bought HellermannTyton in 2006, took it public in 2013 and sold its remaining stake last year.
Delphi said it plans to complete the HellermannTyton deal late in the fourth quarter.
The purchase also allows Delphi to expand into products for other industries, such as aerospace, defense, alternative energy and mass transit, Clark said. Bankers from Goldman Sachs Group and JPMorgan Chase & Co. advised HellermannTyton on the sale, while Barclays Plc. advised Delphi.
Including net debt, the deal values HellermannTyton at about 14.7 times last year’s earnings before interest, tax, depreciation and amortization, the companies said.
Buyers paid a median multiple of 8 times Ebitda for electrical-components companies over the past five years, according to data compiled by Bloomberg.
Delphi also said it bought Ottomatika, a maker of automated driving software, and made an investment in Quanergy, a company that develops light detection and ranging scanners, technology that enables cars to detect objects and execute digital mapping, surface modeling and distant imaging. Those deals will bolster Delphi’s advanced driver-assistance system applications and may help speed the adoption of automated vehicles, the company said.
The component maker also made a minority investment in Tula Technology, a maker of engine-control software that can increase fuel efficiency and cut emissions.
Delphi agreed to sell its reception-systems business, which consists of automotive antennas and in-vehicle TV tuners, to Northeast Industries Group Corp., a Chinese automotive supplier.
Delphi expects to complete the sale in the third quarter, subject to regulatory approval, it said. Financial terms weren’t disclosed for any of the deals other than HellermannTyton.