After the signing of an agreement last week to be acquired by the private equity firm Bain Capital LLC, Auburn Hills, Mich.-based TI Automotive Ltd. is shutting the door on an industry collapse.
Terms were not disclosed, but sources told Bloomberg the deal for the global auto fuel systems company was valued at $2.4 billion.
The existing management team, including Chairman and CEO Bill Kozyra, will continue to lead the company, and no changes will occur operationally.
The deal is subject to approval by TI Automotive shareholders. The closing is expected in mid-2015, Kozyra told Crain's.
In January, TI Automotive reportedly delayed its board vote for the Bain offer to review a competing offer by Pamplona Capital Management LLP, Bloomberg reported. Pamplona's offer was $115 million more than Bain's, according to that report.
The signing of an agreement with Boston-based Bain comes after months of speculation, which began last summer. In November, reports that Bain was courting TI began to surface, but no deal had been reached.
Kozyra said Bain's investment marks the end of TI's ties to the 2009 collapse of the automotive sector, which forced dozens of local suppliers into bankruptcy.
To avoid its own bankruptcy, TI, a supplier of automotive fuel systems, swapped debt for shares with its lenders in December 2009.
"To emerge from that difficult time with little to no debt, we took on unnatural shareholders," Kozyra said. "We knew we needed to create a liquidity event to create a strong, single shareholder.
"Bain really loves the company and sees the great business that we are in. ... We have a partner that will support our growth and strategy."
TI Automotive was previously owned by a consortium of funds led by Oaktree Capital Group LLC.
A source familiar with the deal told Crain's that Kozyra had a troubled relationship with Oaktree and other board members and that the deal "is likely a sigh of relief" for the company's chairman.
Kozyra denied any troubles with the board.
"You wouldn't expect to have too many problems when you've been as successful as we've been," he said. "We've worked very hard to create shareholder value, and that's what really allowed this transaction to occur."
The supplier generated roughly $3 billion in revenue in 2014, up from $2.5 billion in 2011, and employs 24,000 at 130 locations. It was 19th in Plastics News' ranking of North America's biggest blow molders in 2013.
The deal with Bain probably delays an initial public offering.
TI Automotive's owners hired Blackstone Group LP to evaluate a potential IPO. Kozyra declined to discuss the company's strategy but said an IPO could be part of its long-term plan.
"We will be private for the foreseeable future," Kozyra said. "But I think anyone could look at most private companies that are growing to a certain size and wouldn't be surprised if they went public."
