Automotive supplier M&A update: 1H-2016

Market overview

The domestic automotive market has seen mixed results during the first half of 2016 (1H-2016). Year over year light vehicle sales declined by two percent in June 2016, but total light truck sales grew by 5.6 percent during the same time period.1 Although vehicle sales have declined slightly during the first half of 2016, new vehicle transaction prices reached at all-time high of $31,089 in June 2016.2 Consumer spending has remained at record levels due in large part to a continued shift from cars to trucks.

1June 2016 Market Beat, NADA
2JD Power

M&A activity

During 1H-2016, twenty-seven transactions were reported in the automotive supplier industry. The amount of reported transactions has decreased by 22.5 percent compared to the same period during 2015. The decrease in activity can be attributed to the robust number of transactions that closed during 2015. Despite the decrease in transactions, the M&A market for automotive suppliers remains optimistic. Emerging trends such as autonomous vehicles and electric vehicles may also provide opportunity for an increase in M&A activity.

Trading multiples

Comparable public companies were trading in a moderate range as of June 30, 2016; EV/Revenue ranged from 0.4x to 2.5x and EV/EBITDA ranged from 3.9x to 12.1x with a median multiple of 6.5x EBITDA.

Comparable public company analysis3 >

3Adjusted mean removes any outliers that skew the data
Source: Capital IQ (6/30/2016)

Comparable public company EV/EBITDA history

Comparable public companies - EV/EBITDA multiples >

Source: Capital IQ (6/30/2016)
4EV/EBITDA multiples represent the average multiple over the annual periods and the first half of 2016. Outliers were excluded from the adjusted mean.

Automotive supplier comparable transactions

Transactions during the first half of 2016 with reported transaction values are reported below.

Acquisitions with reported transaction values >

Source: Capital IQ (6/30/2016)

Select transactions during the first half of 2016 without reported transaction values are detailed below.

Acquisitions without reported transaction values >

Source: Capital IQ (6/30/2016)

View the full Automotive supplier M&A update >


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