Bain Capital sells FTE Automotive to Valeo for €819.3m

The purchase price represents an estimated entry multiple of 8x 2016 EBITDA. Reuters reported Valeo outbid potential buyers from China in the sales process.

Valeo claims it acquired FTE to pursue its CO² emission-reduction strategy. The group generated sales of €14.5bn in 2015. Last year it acquired the companies Peiker and Spheros as bolt-ons.

Previous funding
PAI Partners sold its 90% stake in FTE Automotive to Bain for €400m in May 2013. Bain's acquisition was supported by high-yield bonds and a small portion of leveraged loans. PAI originally acquired the company for €368m from UK-based HgCapital in 2005, with a debt facility provided by Barclays.

HgCapital acquired FTE in 2003, as the lead in a €150m transaction that comprised €34m in equity, €96m in senior debt from Barclays and €20m from a syndicate of mezzanine providers led by Barclays, according to unquote" data. Other mezzanine providers included Duke Street, GE Capital and IKB Deutsche Industriebank.

Company
FTE was founded in 1943 in Ebern. It now has additional branches in the Czech Republic, Slovakia, China, Mexico, Brazil and the US. It develops, manufactures and sells hydraulic and electro-hydraulic systems for cars and commercial vehicles, as well as innovative high-tech components for various vehicle transmissions.

In 2015, FTE had revenues of €500m, of which a third was in the aftermarket business. The company has 3,700 employees.

People
Valeo – Jacques Aschenbroich (CEO).
Bain Capital – Michael Siefke (managing director).

Advisers
Seller – Rothschild (corporate finance); Goldman Sachs (corporate finance).

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