Sensata Technologies To Buy Privately Held Schrader In $1 Bln Deal

(RTTNews) - Sensata Technologies Holding N.V. (ST), a supplier of sensing, electrical protection, control and power management solutions, Monday said it has agreed to acquire Schrader group of companies from private equity investment firm Madison Dearborn Partners, LLC for a total enterprise value of $1 billion.

Sensata's wholly owned indirect unit Sensata Technologies B.V. will make the purchase of Schrader, which makes tire pressure monitoring sensors or TPMS.

Sensata's Chief Financial Officer Paul Vasington stated that the company expects Schrader to be $0.13 to $0.16 dilutive to adjusted earnings per share in 2014, while $0.18 to $0.21 per share accretive in 2015. The company expects Schrader to provide $0.50 to $0.55 of accretion after integration and debt pay-down and provide an additional $0.18 to $0.22 accretion when China ramps adoption of TPMS.

The transaction is subject to regulatory approval and is expected to close during the fourth quarter of 2014.

Sensata noted that the transaction provides TPMS and additional low pressure sensing capabilities that address large and fast growing sensing markets.

Denver, Colorado - based Schrader, which employs 2,500 people including over 300 engineers, supplies TPMS sensors, valves, tools and training worldwide. TPMS is a vehicle safety feature that is now standard on all cars and light trucks sold in North America and growing in use globally, mainly in Europe and Asia. According to Sensata, fuel economy and safety regulations in each region are driving the rapid adoption of TPMS and Schrader has obtained over 50 percent market share in these regions. In 2014, Schrader is expected to generate approximately $550 million in revenue.

Martha Sullivan, Sensata Technologies President and Chief Executive Officer, said, "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. Additionally, Schrader's expertise in MEMS sensing, wireless communications and ASIC design will be highly complementary."

In the transaction, Barclays Bank PLC and Morgan Stanley Senior Funding, Inc. have committed to provide debt financing.

Centerview Partners acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Sensata Technologies.

Meanwhile, Barclays, Citigroup and Guggenheim Securities, LLC acted as financial advisors and Kirkland & Ellis LLP acted as legal advisor to Schrader.

In a recent deal, Sensata in early August acquired DeltaTech Controls, a manufacturer of electronic operator controls based on magnetic position sensing technology, for a total enterprise value of $190 million. Sensata expects the transaction to add modestly to earnings in 2014, and provide $0.11 to $0.13 per share of accretion once DeltaTech is fully integrated.

On the NYSE, Sensata shares lost $0.14 or 0.30 percent on Friday, and settled at $46.17.