TRANSPORTATION & LOGISTICS AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017 Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. www.harriswilliams.de
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TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. PaulPoggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main,Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative(Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
www.harriswilliams.de
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www.harriswilliams.de
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
AFTERMARKET ECU PLATFORM MAKES ANY VEHICLE A CONNECTED CAR
The Aftermarket Connected Automotive Platform supports connectedapplications and transforms any existing vehicle into a smart connected car,including those lacking pre-installed connectivity capabilities. The solution will beavailable to automotive OEMs, dealers, specialty automotive retailers, and mobilecarriers. The ECU platform comprises a high-performance processor, securityfunctions, and several communication interfaces to link the vehicle to the cloud-based Ignite Platform by Harman. The end-user can add smartphone-enabledapplications including navigation, multimedia (for example AHA Radio), Wi-Fihotspots, remote car controls, and car tracking capabilities.
CAN Newsletter
AUTO PARTS SUPPLIERS LOOK TO RAMP ONLINE SALES
Most manufacturers of automotive aftermarket products — items ranging fromengines and fuel pumps to seat covers and roof racks — aren’t yet equipped toaccept online orders from chains of repair service centers or individual shops,according to a report from the Automotive Aftermarket Suppliers Association. Butthe key word is “yet,” because many plan to offer online ordering soon, the AASAsays. “There appears to be widespread interest in enhancing these transactioncapabilities,” the AASA says in a report it produced this past summer with businesssoftware company SAP SE, “Business Capabilities in an Evolving Industry.”
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
Seat belts, air bags and, more recently, driver-assist features such as lane-departure warnings, collision-avoidance systems and rearview-mirror camerashave dramatically enhanced road safety. But there’s still room for improvement.Innovation and technology are offering a solution — and it’s not that far into thefuture. Autonomous-driving technology offers the promise of greatly reducing thenumber of traffic crashes and saving countless lives, solving one of the greatestpublic health challenges of our lifetime. Today, 90% of accidents are caused byhuman error — autonomous drive technology will help correct for that, providingfor greater confidence, and lower insurance premiums.
The Detroit News
THE ROAD TO A SAFER DRIVING FUTURE
GM CONFIRMS $1 BILLION U.S. INVESTMENT PLAN
General Motors Co. confirmed it will invest an extra $1 billion in its U.S.manufacturing operations and will bring in house some production now beingdone by a supplier in Mexico, days after President-elect Donald Trump ramped uppressure on the nation’s largest auto maker to follow rivals in committing to createU.S. jobs. GM said the investment would create or retain nearly 2,000 newmanufacturing jobs. About 450 of those are needed as GM moves to make its ownaxles for the next generation of its full-size pickup truck, replacing a supplier thatnow makes them in Mexico. GM also said it would add about 5,000 new salariedjobs “over the next few years,” including new engineers working in “advancedtechnologies” and additions to its GM Financial captive-finance unit.
Wall Street Journal
Automotive repairs and maintenance services is definitely a booming business at aglobal level. According to Yahoo’s research, the global automotive repair andmaintenance services market is anticipated to be valued at $441.3 billion by theyear end and is projected to expand at a CAGR of 5.6% over the forecast period,to exceed $750 billion in the coming decade.
Yahoo Finance
GLOBAL INDUSTRY ANALYSIS AND OPPORTUNITY ASSESSMENT, 2016-2026
Manufactures metal components for the automotive industry Acek Desarrollo y Gestión
Industrial SL
12/29/2016 American Driveline Systems, Inc. Offers automotive aftermarket franchising serv ices through its
subsidiaries
American Axle &
Manufacturing Holdings
12/27/2016 Adco Products, Inc. (California) Produces custom automotive accessory serv ices Covercraft Industries, Inc.
12/22/2016* Pendaform Corp. Manufacturer of pick-up truck bedliners for both the OEM and
automotive aftermarket
Century Park Capital
Partners, Inc.
12/22/2016 OBO Banden BV Manufactures and supplies off-road tires Magna Group BV
12/12/2016* Winner Suntex Sdn. Bhd. Manufactures and wholesales tires and inner tubes ecoWise Holdings Ltd.
12/5/2016 KRA International LLC Manufacturers wire harnesses and associated assemblies for
automotive aftermarket products
Patrick Industries, Inc.
12/1/2016* CLARCOR, Inc. Manufacturers filtration products, filtration systems and serv ices Parker-Hannifin Corp.
11/29/2016 Pacific Parts Ltd. Distributes automotive parts and accessories Uni-Sélect, Inc.
11/26/2016 Turisport SL Distributes tires, wheels, and other automobile products KIT Personalizacion Sport SL
11/8/2016 Grohmann Engineering GmbH Develops automated manufacturing systems for batteries and fuel cells Tesla Motors, Inc.
11/18/2016 Fender Gripper, Inc. Manufactures protective fender covers, trunk mats, and carpet
underlayments for the automotive aftermarket
Drake Automotive Group
LLC
11/18/2016 Leffler Industrial Tire & Rubber
Track, Inc.
Manufacturers and supplies industrial tires and rubber tracks Huron Capital Partners LLC
11/3/2016* Metaldyne Performance Group,
Inc.
Prov ides transmission, engine, driveline, and safety critical applications
in passenger, commercial, and industrial vehicles
American Axle &
Manufacturing Holdings
10/31/2016 Autoteile Jakobs GmbH & Co. KG Manufacturers automotive replacement parts, accessories, and
industrial supplies
Hess Holding GmbH & Co.
KG
10/28/2016 JAC Products, Inc. Manufactures roof racks and other automotive body trim JAC Products, Inc. /Private
Group/
10/27/2016* Atwood Mobile Products LLC
/Seating & Chassis Component
Bus/
Designs and manufactures vehicles seating and chassis components Argonaut Private Equity LLC
10/12/2016 Transamerican Auto Parts Manufacturer and distributer of off-road Jeep and truck accessories HCP Management Co. LLC
M&A TRANSACTIONS
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RECENT M&A TRANSACTIONS1,2,3
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
*Denotes pending transactions
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(12.6%)
(7.5%)
5.9%
7.1%
Suppliers
Distributors and Retailers
Vehicle Manufacturers
Dealerships and Services
Providers
(3.0%)
3.9%
13.4%
14.1%
Vehicle Manufacturers
Suppliers
Dealerships and Services
Providers
Distributors and Retailers
(15.8%)
(10.4%)
2.5%
5.9%
Suppliers
Distributors and Retailers
Vehicle Manufacturers
Dealerships and Services
Providers
(2.9%)
0.4%
6.5%
11.1%
Vehicle Manufacturers
Suppliers
Distributors and Retailers
Dealerships and Services
Providers
5.7x
10.2x
10.8x
11.3x
Suppliers
Vehicle Manufacturers
Distributors and Retailers
Dealerships and Services
Providers
7.4x
9.0x
11.8x
12.0x
Suppliers
Vehicle Manufacturers
Dealerships and Services
Providers
Distributors and Retailers
PUBLIC MARKETS OVERVIEW
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TRANSPORTATION & LOGISTICS
TEV / LTM EBITDA TEV / 2017P EBITDA
AVERAGE REVENUE GROWTH (2013 – 2016) AVERAGE REVENUE GROWTH (2016 – 2018P)
AVERAGE EBITDA GROWTH (2013 – 2016) AVERAGE EBITDA GROWTH (2016 – 2018P)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
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16.5%
18.0%
22.3%
29.6%
31.2%
Distributors and
Retailers
S&P 500
Vehicle
Manufacturers
Suppliers
Dealerships and
Service Providers
(4.0%)
(3.1%)
(1.6%)
0.4%
0.7%
Vehicle
Manufacturers
Suppliers
Distributors and
Retailers
S&P 500
Dealerships and
Service Providers
(25%)
(15%)
(5%)
5%
15%
25%
35%
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17
Suppliers Distributors and Retailers
Dealerships and Service Providers Vehicle Manufacturers
S&P 500 Index
STOCK PRICE PERFORMANCE
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TRANSPORTATION & LOGISTICS
(Indexed to January 8th, 2016)
TRAILING TWELVE MONTHS
MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
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OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marineand air transportation, transportation equipment, and the automotive and heavy duty vehicle market.
TRANSPORTATION & LOGISTICS
RECENTLY CLOSED T&L TRANSACTIONS
DEEP EXPERIENCE ACROSS T&L SECTORS
MARINE TRANSPORTATION
NICHE TRANSPORTATION
TRANSPORTATION EQUIPMENT
RAIL & RAIL SERVICES
AUTOMOTIVE & HEAVY DUTY
VEHICLE
THIRD-PARTY LOGISTICS
AIR TRANSPORTATION
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AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website.
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OUR FIRM
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ JANUARY 2017
Harris Williams & Co. (www.harriswilliams.com and www.harriswilliams.de) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.
