According to a recent study completed by PwC, the global automotive supplier M&A deal value will likely exceed $48 billion in 2015, easily overtaking the previous high in 2007 of $35 billion, as measured by transactions closed within the calendar year.
At the same time, the average number of deals and the deal size – after excluding large deals over $500 million in value – will remain approximately the same at 200 and with about $100 million in transaction value, respectively.
The study reveals that for the fifth consecutive year, North American suppliers are the strongest consolidators in 2015 as nine out of the top 10 consolidators are North American suppliers. PwC Strategy&’s annual list of top auto supplier consolidators includes 23 companies: 12 are North American, six European, two Japanese, two South Korean and one Chinese.
“Auto supplier consolidation is fueled by a number of factors, including the long-term growth in global vehicle production, five years of double-digit growth for many global suppliers, technological developments related to light weighting, powertrain enhancements, “connected car” and autonomous driving, as well as a strong uptick in Private Equity activity,” said Dietmar Ostermann, PwC Strategy&’s Global Automotive Advisory Leader and one of the authors of the study.
PwC Strategy& analyzed the top consolidators of the past five years and found that 70% of them outperformed their peer group in EBITDA growth. Five of the top 10 consolidators grew EBITDA margins by more than 50 percent. On average, this group executed eight deals each in that period. The most acquisitive company performed 39 deals and grew EBITDA by $1.3 billion and increased margins by 35 percent at the same time. Ostermann adds: “In the automotive supplier world, clearly most acquisitions are successful.”
The study identifies that in the last 12 month 42 percent of all deals were in the powertrain and chassis systems of the automobile.
For more details about the Consolidation in the Global Automotive Supply Industry 2015, contact PwC for a copy of the presentation or request the report that will be published in fall.
The eighth annual Consolidation in the Global Automotive Supply Industry 2015 study evaluates the largest automotive suppliers worldwide with respect to financial and operational performance and acquisition history. The expanded 2015 study includes 819 suppliers from key regions, such as Brazil, China, Europe, India, Japan, North America, South Korea and South-East Asia. The annual study is developed by the automotive team of Strategy&, PwC’s Strategy Consulting unit.
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