Electric motors and motion subsystems firm Johnson Electric Holdings will purchase Stackpole International group of companies, an engine and transmission pumps powder metal components supplier for automotive sector in a deal valued at $608m.
Johnson Electric will fund the acquisition with a mix of its current cash balances and proceeds from existing revolving credit facilities.
It has been estimated that the total consideration payable by Johnson Electric, inclusive of costs associated with the planned early retirement of Stackpole's high-yield debt, could be up to $659m.
The transaction is likely to close in the fourth quarter of 2015.
Johnson Electric chairman and CEO Dr. Patrick Wang said: "We identified pumps and highly-engineered components as strategic priorities for Johnson Electric to strengthen our position as a supplier to key engine and transmission applications that contribute to improved fuel economy and reduced emissions.
"Acquiring Stackpole's oil pump technology and powder metal expertise is an excellent fit that will enable us to provide integrated motorised pump solutions to customers in a rapidly growing market segment within the automotive industry.
"In addition, the acquisition will significantly increase our exposure to the North American automotive market which is presently experiencing strong demand, as well as provide attractive longer term growth platforms in Europe and Asia."
Based out of Canada, Stackpole has a workforce of over 2,000 across a global operating footprint, including nine manufacturing units in North America, Europe and Asia. Stackpole is currently owned by SI Investors, a limited partnership majority owned by Crestview Partners.
Perella Weinberg Partners discharged the responsibilities of sole financial advisor to Johnson Electric. Latham & Watkins and Blake, Cassels & Graydon played the role of legal advisers to Johnson Electric.
Johnson Electric Group caters to automotive, building automation and security, business machines, food and beverage equipment, home technologies, HVAC, industrial equipment, medical devices, personal care, power equipment and power tools with a headcount at 36,000 across Asia, the Americas and Europe.
