29th Nov 2024 08:41
(Alliance News) - TI Fluid Systems PLC on Friday accepted a GBP1.04 billion offer by Canadian automotive components maker ABC Technologies.
ABC, owned by affiliated funds of Apollo Global Management IX LP, will pay 200.0 pence in cash for each TI Fluid share, a 55% premium to the thermal management and fluid handling systems provider's share price of 129.5p on September 13.
September 13 was the last trading day before TI Fluid entered an "offer period".
The deal gives TI Fluid a GBP1.83 billion enterprise value, including debt.
In September, TI Fluid rejected two approaches from ABC Technologies, worth 165p and 176p per share respectively.
In October, the firm said it was "minded to recommend" a 200p per share offer, after spurning two further proposals at 188p and 198p per share respectively.
Shares in TI Fluid rose 2.0% to 193.00p in London on Friday morning, valuing the firm at GBP984.2 million.
TI Fluid said the terms "provide the opportunity" for shareholders to "realise an immediate and certain cash value today" at a level which "may not be achievable until the execution of TI Fluid Systems' strategy is delivered over the medium to longer term."
For its part, Toronto-based ABC said it believes that TI Fluid Systems represents a "compelling opportunity to acquire a leading global manufacturer of fluid systems and thermal management solutions that is strategically and culturally complementary."
The TI board said it considered the terms "fair and reasonable" and backed the deal "unanimously".
The Oxford, England-based maker of thermal management and fluid handling systems, noted the significant disruption currently affecting the global automotive industry, and the adverse impacts on some of its larger European customers.
Against this backdrop, TI Fluid thinks it will be "more challenging" to achieve its financial objectives in the near term.
TI Fluid said it also believed its long-term potential has not, over time, been entirely reflected in the share price price and market valuation.
TI Fluid Chair Tim Cobbold said. "The combination will result in a larger, more diversified business with a broader range of products and customers, better positioned to navigate the current challenges facing the automotive industry and deliver sustainable long-term growth."
The bid has the backing of TI Fluid investors, representing around 35% of share capital.
The deal is expected to complete during the first half of 2025.
By Jeremy Cutler, Alliance News reporter
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