Auburn Hills, Michigan – BorgWarner has agreed to buy Remy International Inc., a global producer of rotating electrical components. With key technologies and operations in 10 countries on five continents, Remy is strongly positioned to benefit from global growth. As of December 31, 2014, the company employed 6,600 people and, for the fiscal year, it generated sales of $1.2 billion.
“We look forward to welcoming Remy’s talented employees to BorgWarner. Their products and capabilities will strengthen BorgWarner’s position in the rapidly developing powertrain electrification trend,” says James Verrier, president and CEO of BorgWarner. “The acquisition will be another step in executing our plan, to profitably grow revenue to $15 billion by 2020.”
BorgWarner will acquire each of the outstanding shares of Remy for $29.50 in cash, which implies an enterprise value of Remy of approximately $1.2 billion. BorgWarner has identified purchasing efficiencies, redundant public company expenses, other cost synergies and numerous opportunities to accelerate growth through the combined business. The transaction is expected to be accretive to earnings in the first year.
The completion of the transaction is subject to certain customary terms and conditions, including the approval of Remy’s stockholders and antitrust and other regulatory clearances in the United States and abroad. The transaction is expected to close in the fourth quarter of 2015.
Remy Chairman John Weber says, "The product and technology synergies are obvious, resulting from each company's historical focus on separate areas of the global powertrain market."
Remy President and CEO Jay Pittas adds, "Our products and capabilities should complement BorgWarner very well and support growing vehicle electrification trends. We are confident our customers and channel partners will benefit from the strategic fit, as it brings together two long-standing industry leaders."
Sources: BorgWarner, Remy International