Johnson Electric has entered into an agreement to acquire Stackpole International, a portfolio company of Crestview Partners, at an enterprise valuation of C$800 Million (US$608 Million). Crestview Partners acquired Stackpole in a corporate carve-out from Gates Corporation in 2011.
Stackpole International is a supplier of transmission and engine oil pumps and powder metal components to automotive original equipment manufacturers and Tier 1 suppliers. The company has more than 2,000 employees and operates nine manufacturing facilities located in North America, Europe and Asia. Stackpole was founded in 1906 by H.C. Stackpole and US Representative (Pennsylvania) James Hall to manufacture dry battery cells for Henry Ford. The company is headquartered southwest of Toronto in Ancaster, ON (www.stackpole.com).
Stackpole’s consolidated revenues for the year ended December 31, 2014 were C$487 million and 2014 EBITDA was C$82 million. This results in an enterprise valuation multiple of just under 10x.
Johnson Electric is a manufacturer of electric motors and motion subsystems. Products include brushless, DC, AC, stepper, piezo, and gear motors; and solenoids, starters, pumps, blowers, valves, gearboxes; and automotive actuators. The company also offers automotive switches and subsystems, micro switches, manually operated switches, panel mounted switches, and energy saving automatic shut off switches. Johnson Electric’s products are used in a range of industries including automotive, building automation and security, defense and aerospace, food and beverage, HVAC, industrial equipment and medical devices. Annual revenues for Johnson Electric are approximately US$2 billion. The company was founded in 1959 and is headquartered in Shatin, Hong Kong (www.johnsonelectric.com).
“We identified pumps and highly-engineered components as strategic priorities for Johnson Electric to strengthen our position as a supplier to key engine and transmission applications that contribute to improved fuel economy and reduced emissions,” said Dr. Patrick Wang, Johnson Electric’s Chairman and Chief Executive Officer. “Acquiring Stackpole’s oil pump technology and powder metal expertise is an excellent fit that will enable us to provide integrated motorized pump solutions to customers in a rapidly growing market segment within the automotive industry. In addition, the acquisition will significantly increase our exposure to the North American automotive market which is presently experiencing strong demand.”
Crestview Partners invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of specific interest include energy, financial services, healthcare, industrials and media. Crestview, founded in 2004 and headquartered in New York, manages funds with over $7 billion of aggregate capital commitments (www.crestview.com).
Johnson Electric will finance the acquisition with a combination of its current cash balances and proceeds from existing revolving credit facilities. Perella Weinberg was the sole financial adviser to Johnson Electric.
© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15