Developments in 2006 and Outlook for 2007 for Mergers and Acquisitions in the Automotive Supplier Sector

DUBLIN, Ireland--Research and Markets has announced the addition of Mergers and Acquisitions in the Automotive Supplier Sector to their offering.

This is the definitive assessment and forecast of the state of the automotive supply chain globally. It is certainly your best-available source of understanding, insight and analysis of the automotive supply base.

Recent and ongoing events in the North American and European auto supplier sector have once again highlighted the important role merger and acquisition (M&A) activity can play in the industry’s restructuring. Current industry challenges suggest an intensification of this activity now appears possible in 2006/07, representing continuation of an evolution that has been apparent for over ten years. The dynamic nature of this trend has resulted in a significant realignment of the global supplier sector, as players have exited and entered the business, either partially or completely, willingly or reluctantly, or used M&A to redefine and sharpen corporate strategy around core businesses.

Recent high-profile bankruptcies at a number of major North American suppliers have pinpointed flawed business models and significant legacy issues that continue to damage financial performance, the result of which may well be the need for some further dramatic business restructuring. This could well give rise to significant additional M&A opportunities that, in turn, are attracting new visionary financial players, confident of their abilities to drive through major structural change in some sectors, to the arena.

Few days pass without further news of actual or potential restructuring moves involving the purchase or sale of assets between differing parties. Furthermore, this public domain information is probably just the tip of the iceberg, with further extensive behind-the-scenes activity also being discussed, evaluated and analysed. This activity encompasses suppliers at all tiers (not just tier 1), OEMs and parties with predominantly financial interests, most notably the private equity players. This complexity of activity makes analysis of overall trends difficult, with many deal drivers apparent, but certain themes have emerged.

One such theme is the continuing desire of many suppliers, especially the larger and more diversified tier 1 vendors, to whittle down their structures to focus on ‘core’ operations only…

About the Author

Colin Whitbread, BSc(Econ), MSC(Econ), is a writer/consultant and former financial analyst, specialising in the global automotive supplier sector. He is also a current member of Automotive World's editorial board, covering component and supply issues, and has worked in the past for the EIU (Economist Intelligence Unit), Global Insight, AutoBusiness and SupplierBusiness.

Content Outline:

Executive Summary

Overview

M&A activity trends

Deal numbers and value

Key transactions

The five key motives for supplier M&A activity

1) Back to basics

2) Globalisation

3) Financial distress

4) Pure diversification

5) Component sector consolidation

Summary of other motives

Provision of finance

Overview

Private equity-led acquisitions

Private equity-led disposals

Hedge funds

The leading private equity players

Carlyle

Blackstone

Cypress

Heartland

Hg Capital

Patriarch Partners

Ripplewood Holdings

KPS Special Situations Funds

WL Ross & Co

Outlook and future trends

Developments in 2006 and outlook for 2007

The position of trade and financial interests

Profiles of recent deals

Plastal/DNK

Oxford Automotive/Wagon plc

TRW/ Dalphimetal

Asahi Tec/ Metaldyne

Continental/Motorola Automotive Electronics