Madison Dearborn Exits Schrader
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Madison Dearborn Exits Schrader

schrader nf1Madison Dearborn Partners has sold Schrader International, a manufacturer of tire pressure monitoring sensors, to Sensata Technologies, for a total enterprise value of $1 billion.  Schrader is expected to generate approximately $550 million in revenue in 2014 and the purchase price represents just less than a 10x multiple of estimated 2015 stand-alone EBITDA.  The transaction is expected to close during the fourth quarter of 2014.

Madison Dearborn acquired Schrader from Tomkins Plc, a UK auto-parts supplier, for $505 million in cash in April 2012.  Tomkins is jointly owned by Onex Corporation and the Canada Pension Plan Investment Board.

Schrader is the world’s leading manufacturer of tire pressure monitoring systems (TPMS) used by automotive and industrial companies.  TPMS are a vehicle safety feature that is now standard on all cars and light trucks sold in North America and growing in use in Europe and Asia.  Fuel economy and safety regulations in each region are driving the adoption of TPMS and Schrader has obtained more than a 50% market share in these regions.  Schrader is headquartered in Denver and has sales and engineering offices in the United States, the United Kingdom, Germany, China, Japan and South Korea. Manufacturing facilities are located in the United States, United Kingdom, France, Brazil and China.  Schrader employs 2,500 people globally, including over 300 engineers (www.schraderinternational.com).

high charvat“Today is an exciting day as we move into the next phase in the evolution of Schrader.  The addition of Schrader to Sensata’s product portfolio makes sense strategically and operationally; we are aligned on our plans to continue to grow the business,” said Hugh Charvat, Schrader Chairman, President and Chief Executive Officer.  “I would like to thank Madison Dearborn Partners for their partnership over the past few years. Their commitment and advice have helped us surpass our ambitious goals.”

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; health care; and telecom, media and technology services.  Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

Sensata Technologies (NYSE: ST) is a supplier of sensing, electrical protection, control and power management products. Sensata’s products are used in automotive, appliance, aircraft, industrial, military, heavy vehicle, heating, air-conditioning, data, telecommunications, recreational vehicle and marine applications.  The company has operations and business centers in eleven countries and is based in Almelo, Netherlands (www.sensata.com).

“The acquisition of Schrader extends Sensata’s leadership position in pressure sensing and provides further access to a rapidly growing $2 billion low pressure sensor market where the largest current opportunity is in TPMS,” said Martha Sullivan, Sensata Technologies President and Chief Executive Officer.

Barclays Bank and Morgan Stanley Senior Funding have committed to provide debt financing to support the transaction.

Centerview Partners acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to Sensata Technologies. Barclays, Citigroup and Guggenheim Securities acted as financial advisors and Kirkland & Ellis acted as legal advisor to Schrader International.

2014 PEPD • Private Equity’s Leading News Magazine • 8-18-14

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