Automotive Newsletter Q1 2019
Overview of M&A activity
In Q1 2019, the number of deals in the Automotive sector decreased compared to Q4 2018, however, the total deal value increased by 27% to €1.9bn.
M&A activity in Q4 2018 was influenced by the continuing trade tensions between the US and China, uncertainties around Brexit, a weak market in China and delayed deliveries due to the roll out of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). Q1 2019 showed the first signs of improvements, with WLTP effects softening, a more optimistic view on the recovery of the Chinese market and the increased probability of achieving a trade agreement between the US and China. The M&A market has seen continued consolidation in the ICE area, while Tier 1s are trying to reshape their business models through M&A in electrification, autonomous driving, connectivity and advanced driver assistance systems (ADAS).
In Q1 2019, automotive multiples increased strongly in all regions when compared to Q4 2018: EV/EBIT multiples surged in Europe by 22%, in North America by 14% and in Asia by 13%. EV/EBITDA multiples increased in Europe by 2%, in North America and in Asia by 10%.
Top M&A Deals Q1 2019
- A group of investors (consisting of T.Rowe Price Associates, Index Ventures, Greylock Partners, Shell Ventures, Geodesic Capital, Lightspeed Venture Partners and Reinvent Capital) led by Sequoia Capital, the US-based private equity and venture capital firm, has acquired an undisclosed stake in Aurora Innovation, Inc., a US-based engineering provider with focus on software and hardware of autonomous driving cars, for an estimated €470m.
- MAHLE Powertrain Ltd (MPL), a UK-based subsidiary of MAHLE GmbH, engaged in providing engineering services, has acquired ZG-Zahnrader und Getriebe GmbH (ZGG), a Germany-based manufacturer of transmission systems.
- Dana Incorporated, a listed US-based designer and manufacturer of light & commercial vehicle motion control, driveline and power components, has acquired SME S.p.A, an Italy-based company engaged in manufacturing of electronic controllers and related products for battery powered vehicles.
- Novares Group S.A.S, a France-based portfolio company of Equistone Partners Europe specialising in manufacturing and selling plastic parts and systems for vehicle body and engines, has acquired MPC Corp., a US-based automotive thermoplastic components and assemblies company.
- A group of investors (consisting of Standard Chartered plc, Sumitomo Corporation of Americas and Abdul Latif Jameel Co. Ltd.) led by Amazon.com, Inc., a listed US-based online retailer selling books, magazines, music, DVDs, videos, electronics, computers, software, apparel and accessories, has acquired an undisclosed stake in Rivian Automotive, Inc., the US-based developer of electric self-driving trucks, for €620m.