Automotive Industry M&A Synopsis and Key takeaways
Landmark M&A Announcement
CentroMotion to Acquire Carlisle Brake & Friction, Creating a Leading Global Technology Player Focused on Mission-Critical Applications for Industrial and Transportation Markets | ||
Enterprise Value (EV) $375 million |
EV / Revenue 1.36x |
EV / EBITDA 5.0x |
On May 25, 2021, CentroMotion announced an agreement to acquire Carlisle Brake & Friction in a transaction with a total enterprise value of approximately $375 million. The transaction will expand CentroMotion’s portfolio of well-established brands in the industry, including CrossControl, Elliott Manufacturing, Gits Manufacturing, maximatecc, Power-Packer, and Weasler Engineering.
“As we became better acquainted with the CBF team, we found that they share CentroMotion’s commitment to quality, continuous improvement, and a compelling customer value proposition differentiated by subject matter expertise, application knowledge, and leading technologies. Together, an integrated CBF and CentroMotion will serve as a holistic solutions provider to our joint customer base, with unparalleled breadth and depth of offerings across platforms and product lines.”
- Roger Roundhouse, Chief Executive Officer of CentroMotion
Key takeaways
Facing a numerous supply chain issues, the auto industry may see conditions substantially improve in 2022
- The automotive industry, looking to overcome a difficult 2020, faced several roadblocks in the first two quarters of the year due to supply chain challenges
- A severe shortage in semiconductor supply adversely affected the production volumes in the auto industry
- Mounting headwinds from rising steel prices, container scarcity, labor shortage, and other seasonal factors posed additional challenges
- The ongoing supply chain constraints are expected to improve in the latter half of 2021 and early 2022
- 2022 may considerably improve M&A conditions for automotive OEM suppliers, once current challenges are overcome
Valuation Observations and Sector Performance
- The valuation multiples for auto parts suppliers have slightly increased over the previous quarter
At the end of Q2’21 the average EV / LTM EBITDA multiples were | NA Auto Parts Manufacturers |
12.5x (0.6)x Q-o-Q |
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