Delphi Automotive to buy UK's HellermannTyton Group
30 July 2015
Delphi Automotive Plc said it would buy UK's HellermannTyton Group for around £1.07 billion to expand its electrical architecture business.
The deal would help the company leverage the connected car mega trend and will add 15 cents to its earnings per share starting 2016, according to the auto supplier.
"HellermannTyton positions Delphi to provide customers with an even broader portfolio of highly engineered and customised connection systems and cable management solutions," said Delphi chief executive Kevin Clark, Reuters reported.
Delphi's 480 pence in cash offer for each HellermannTyton share, would come as a 44-per cent premium to its closing price on the London Stock Exchange yesterday.
According to Clark, in April the company could spend $1 billion to $3 billion (£641 million to £1.92 billion) in 2015 on a large acquisition related to its traditional "hardware" business and will make smaller investments in software.
Vehicle connectivity and methods to increase fuel efficiency were high-margin and high-growth areas in the automotive industry as vehicles with the autonomous trend and automakers strive to meet stringent US fuel economy regulations.
Delphi said today it bought software company Ottomatika and made a strategic investment in 3D LiDAR sensing company, Quanergy.
According to Rupert Stadler, CEO, Audi AG, the world's second-biggest luxury-car maker, digital services would have the most impact on the auto industry's technology development in coming years.
''Delphi continues to be focused on the car of the future,'' said Chris McNally, an analyst at Evercore ISI in London who recommends buying the shares, Bloomberg reported. ''It's leading this charge into the connected cars space.''
HellermannTyton, which traces its roots to German and UK manufacturers was up 42 per cent to 471.1 pence in London in the morning. The firm was taken over by Doughty Hanson & Co, in 2006, which took it public in 2013 and sold its remaining stake last year.
Delphi said it planned to complete the HellermannTyton deal late in the fourth quarter. ''With consumers now demanding more connectivity in their vehicles, electrical architecture is the enabler to that added vehicle content,'' Clark said in a statement.
With the purchase, Delphi would also be able to expand into products for other industries, such as aerospace, defense, alternative energy and mass transit, he said.