Delphi Positions for Strong Growth with Acquisitions and Investments; Expands Capabilities
2015-07-30 06:00:00.174 GMT
Delphi Positions for Strong Growth with Acquisitions and Investments;
Expands Capabilities
* Delphi to acquire HellermannTyton for £1.07 billion, expanding its
Electrical/Electronic Architecture global business
* Acquisition of software company, Ottomatika, and strategic investment in
3D LiDAR company, Quanergy, boost leading active safety and automated
driving capabilities
* Investment in software company Tula Inc. expands Powertrain offerings
* Company divests reception systems business
Business Wire
GILLINGHAM, England -- July 30, 2015
Strengthening its capabilities and portfolio offerings in key industry growth
areas, Delphi Automotive PLC (NYSE: DLPH) has executed a series of
acquisitions, investments and a divestiture.
HellermannTyton: Delphi has reached agreement on a recommended offer to
acquire HellermannTyton Group PLC (LSE: HTY), a leading global manufacturer of
high-performance and innovative cable management solutions, for 480 pence in
cash per share, which translates to approximately £1.07 billion of market
capitalization and implies an enterprise value of $1.85 billion at today’s
exchange rate.
The transaction has been recommended by the board of HellermannTyton and is
expected to close late in the fourth quarter of 2015, subject to regulatory
consents and approvals and approval by HellermannTyton’s shareholders. Upon
completion, HellermannTyton will become part of Delphi’s Electrical/Electronic
Architecture segment.
The acquisition expands Delphi’s product portfolio within the connected
vehicle solutions market and will help capitalize on the connected car
megatrend. It also further strengthens Delphi’s leading position in the
electrical architecture market, while providing a platform to grow in
HellermannTyton’s adjacent industrial end markets, including aerospace,
defense, alternative energy and mass transit.
“With consumers now demanding more connectivity in their vehicles, electrical
architecture is the enabler to that added vehicle content,” said Kevin Clark,
Delphi president and chief executive officer. “HellermannTyton positions
Delphi to provide customers with an even broader portfolio of highly
engineered and customized connection systems and cable management solutions.
By leveraging the combined capabilities of both companies, we will be able to
capitalize on additional growth opportunities and create significant value for
our customers and shareholders.”
Strategic and Financial Benefits
* Extends Delphi’s leadership in electrical architecture components.
HellermannTyton has a leading market position in providing cable
management solutions in the vehicle and has an extensive range of products
that are mission-critical in nature and are highly engineered to customer
specification.
* Strong growth fundamentals and EBITDA margins. HellermannTyton has a
well-established track-record of growing 3-5 percentage points faster than
its end markets and has realized top-line constant currency CAGR of
approximately 10 percent per year since 2010, while maintaining EBITDA
margins of approximately 20 percent.
* Transaction is accretive to Delphi’s EPS. Delphi expects the transaction
to be 15 cents accretive to earnings per share starting in 2016.
* Significant operating and revenue synergies. The acquisition will also be
immediately accretive to growth and margins based on significant operating
synergies from sourcing and supply chain initiatives. Delphi has a strong
track record of successfully integrating businesses like HellermannTyton
and believes it will be able to achieve synergies of approximately $50
million per year by the end of 2018 through sourcing savings, supply chain
savings and leveraging the combined product portfolio.
* Allows Delphi to capitalize on attractive industrial end markets. The
acquisition of HellermannTyton will enhance Delphi’s already strong
relationships with key global automakers and will provide access to
HellermannTyton’s non-automotive end markets.
Ottomatika and Quanergy: To enhance its leading active safety and automated
driving capabilities, Delphi has acquired software company, Ottomatika, and
has made a strategic investment in 3D LiDAR sensing leader, Quanergy. These
strategic moves strengthen Delphi’s advanced driver assistance system (ADAS)
applications and could help speed the adoption of automated vehicles. The
ability to detect objects and execute digital mapping, surface modelling and
distant imaging is enabled by the use of Light Detection and Ranging (LiDAR)
scanners.
By combining Ottomatika’s automated driving software with Delphi’s active
safety systems, the two companies have developed a technology platform for
automated driving that enables a vehicle to make human-like decisions.
Quanergy and Delphi will collaborate to bring a range of low-cost,
high-performance solid state LiDAR products to the automotive market to
provide a complete vehicle perception solution for Level 3 and 4 automation
applications. The prospect of a lower-cost ADAS solution could bring
widespread adoption of the life-saving active safety technology.
Tula Technology: Delphi also made a minority investment in Tula Technology,
which develops software that provides cost-efficient, fuel economy gains in
cylinder deactivation technology. Delphi and Tula’s engine control system
software can increase fuel efficiency and cut emissions without sacrificing
drivability or performance. The combined solution will allow the engine’s
cylinders to fire or skip (deactivate) on a continuously variable basis, which
ultimately increases fuel efficiency by up to 15 percent in a cost-efficient
manner.
“These companies bring unique and strategic capabilities in software and
sensing technology, strengthening our portfolio in active safety and fuel
economy, two critical long-term growth areas for the automotive market,” said
Jeff Owens, Delphi chief technology officer. “We have had strong working
relationships with these companies and believe the synergies are excellent. We
continue to explore additional acquisition and investment opportunities that
will enhance our growth in our core safe, green and connected areas of focus.”
Reception Systems: Additionally, Delphi has entered into a definitive
agreement to sell its reception systems business, which consists of automotive
antennas and in-vehicle TV tuners, to Northeast Industries Group Corp., a
leading Chinese automotive supplier. Delphi expects to complete the sale in
the third quarter of 2015, subject to regulatory approval.
Conference Call and Webcast
Delphi will host a conference call to discuss financial results and these
transactions today at 8:30 a.m. (ET). A link to the live webcast of the call
and presentation materials will be available on the Delphi Investor Relations
website at http://investor.Delphi.com/. To participate by telephone, please
dial 888.486.0553 (U.S.) or 1.706.634.4982 (international) 15 minutes prior to
the start time of the call and ask to be connected to the Delphi Automotive
conference call. The conference ID number is 75261541.
About Delphi
Delphi Automotive PLC (NYSE: DLPH) is a leading global technology company for
automotive and commercial vehicle markets delivering solutions that help make
vehicles safe, green and connected. Headquartered in Gillingham, U.K., Delphi
operates technical centers, manufacturing sites and customer support services
in 33 countries. Visit www.delphi.com.
Forward Looking Statement
This press release contains forward-looking statements within the meaning of
the Securities Act of 1933 and of the Securities Exchange Act of 1934. These
forward-looking statements reflect, when made, Delphi's current views with
respect to current events and certain investments and acquisitions by Delphi.
All statements that address our expectations surrounding consummation of such
transactions and their impact on Delphi, as well as future operating,
financial or business performance or our strategies or expectations are
forward-looking statements. Such forward-looking statements are subject to
many risks, uncertainties and factors relating to Delphi's operations and
business environment as well as market conditions, which may cause Delphi’s
actual results to be materially different from any future results, express or
implied, by such forward-looking statements. In some cases, you can identify
these statements by forward-looking words such as “may,” “might,” “will,”
“should,” “expects,” “plans,” “intends,” “anticipates,” “believes,”
“estimates,” “predicts,” “projects,” “explore,” “potential,” “outlook” or
“continue,” and other comparable terminology. Factors that could cause actual
results to differ materially from these forward-looking statements include,
but are not limited to, the following: our ability to consummate pending
acquisitions and our ability to integrate and realize the benefits of pending
and recent acquisitions; global economic conditions, including conditions
affecting the credit market; the cyclical nature of automotive sales and
production; the potential disruptions in the supply of and changes in the
competitive environment for raw material integral to our products; our ability
to maintain contracts that are critical to our operations; our ability to
attract, motivate and/or retain key executives; our ability to avoid or
continue to operate during a strike, or partial work stoppage or slow down by
any of our unionized employees or those of our principal customers, and our
ability to attract and retain customers. Additional factors are discussed
under the captions “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our filings with the
Securities and Exchange Commission, including those set forth in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2014. New risks and
uncertainties arise from time to time, and it is impossible for Delphi to
predict these events or how they may affect Delphi. Delphi disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events and/or otherwise, except
as may be required by law.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20150729006890/en/Contact:
Delphi Automotive PLC
Investor Contact:
Jessica Holscott
248.813.2312
Jessica.Holscott@delphi.com
Media Contact:
Claudia Tapia
248.813.1507
Claudia.Tapia@delphi.com
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