Robert Bosch's starter motor division attracts interest from PE firms and Chinese groups
14 October 2016
German car parts maker Robert Bosch has attracted interest from private equity firms and Chinese groups for its starter motor and generator division, Reuters yesterday reported, citing people close to the matter.
Private equity firms Advent International, Bain Capital, Triton, Centerbridge Partners and KPS Capital Partners are expected to table tentative offers by 17 October deadline, alongside Chinese companies, the report said.
Bosch had in June 2015 said that it is seeking a partner for the business, and had hired Morgan Stanley to assist in the sale, and had send out information packages to prospective buyers.
"The Starter Motors and Generators division has successfully managed to transform itself over the past few years and is posting positive results. The division is well positioned internationally, and has technically and commercially competitive products that are very well received by our customers," Dr. Rolf Bulander, Bosch board of management member responsible for the Mobility Solutions business sector had then said.
"Nonetheless, in a market characterised by tough competition and cost pressure, the division has better growth prospects together with a partner or buyer," he added.
Bosch said that there is considerable overcapacity in the market for starter motors and generators leading to considerable cost and competitive pressure. Moreover, technological developments are also putting starter motors and generators under increasing pressure.
According to bosch, downsizing – smaller engines with smaller starter motors – is reducing value added, which would lead to a market shake-out, in which only a leading market position will offer long-term prospects of success and growth.
But with a partner or buyer, the starter motors and generators division can use combined efforts of the partner or buyer to significantly reduce its costs, Bosch noted.
The business has sales of more than €1 billion ($1.1 billion), employs around 6,500 people, has 13 manufacturing sites, and may be valued at more than €500 million.
Its main competitors are Denso, Valeo, Delphi and BAIC.
Bosch's supplies starter motor and generator for passenger cars and commercial vehicles, start-stop starter motors for start-stop systems and electric motors for hybrid vehicles.