Sensata to acquire sensing portfolio of CST for $1B

ATTLEBORO – Sensata Technologies Holding N.V. has reached an agreement to acquire the sensing portfolio of Custom Sensors & Technologies Inc. for $1 billion, a move that will extend the company’s reach beyond the automotive industry.
Jacob Sayer, vice president of treasury and investor relations for Sensata, said on Thursday that the acquisition, expected to close in the fourth quarter or early 2016, will allow Sensata to extend its sensing content into markets including aerospace, industrial and heavy vehicles, where it already has a small position, as well as medical devices.
Sayer described Custom Sensors & Technologies, which is headquartered in California, as a worldwide company, like Sensata, which operates in 16 countries with 17,500 employees.
The acquisition includes Custom Sensors & Technologies’ BEI, Crydom, Kavlico and Newall product lines and brands and includes sales, manufacturing and engineering sites in the United States, United Kingdom, Germany, France, China and Mexico that employ approximately 2,500. Revenue for the business being acquired was approximately $320 million during the last 12 months, according to information from Sensata.
Sayer said the acquisition will not impact operations in Attleboro.
“This acquisition further extends our sensing content beyond automotive markets and builds scale in pressure sensing,” Martha Sullivan, Sensata Technologies president and CEO, said in a statement. “These are long-standing sensing brands that are well respected by leading [original equipment manufacturers]. We are excited to welcome this talented team into Sensata’s global organization.”
Paul Vasington, Sensata Technologies’ chief financial officer, said CST is a “profitable and highly cash generative business with EBITDA margins of approximately 26 percent.”
“Including interest and integration expenses, we expect this acquisition to be breakeven to adjusted net income in the first full year and to be [23 cents to 26 cents] accretive to adjusted net income per diluted share in the third year,” he said.
Bank of America Merrill Lynch has committed to provide debt financing to support the transaction.

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