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Sensata Picks Up PE-Backed DeltaTech Controls

Stocks in this article: ST

NEW YORK (The Deal) -- Sensata Technologies Holding ST, the Dutch provider of sensors and controls for aircraft, automotive systems and electric motors, said Monday it would acquire DeltaTech Controls from private equity-backed CoActive Technologies For an enterprise value of $190 million.

The deal marks a partial exit for Greenwich, Conn., PE firm LittleJohn & Co. LLC, which inherited DeltaTech through its acquisition of CoActive Technologies from ITT Corp. on July 27, 2007, for an undisclosed price. CoActive will be comprised entirely of its C&K Components division, which provides switch technology, smart card connectors and high-reliability connectors, once the deal is completed.

Berlin-based DeltaTech makes custom electronic operator controls for the construction, agriculture, material handling, motorbike and medical industries. The company is expected to generate $125 million in revenue during 2014, implying an enterprise value-to-revenue multiple of about 1.5 times.

The acquisition is expected to be slightly accretive to earnings in 2014 and add between 11 cents and 13 cents to earnings per share once fully integrated, Almelo, Netherlands-based Sensata said in a July 7 statement.

The deal follows Sensata's Jan. 3, acquisition of Wabash Technologies Inc. from an affiliate of Sun Capital Partners Inc. for an undisclosed price, and appears to be a harbinger of more M&A to come.

"We are looking for further acquisitions," Jacob Sayer, Sensata's vice president of investor relations, said via phone. "In particular, we're looking for other sensor businesses that are closely aligned with our current business."

The company is currently talking with a wide range of potential targets that generate anywhere from a few million dollars to a few hundred million dollars in annual revenue, Sayer said.

The $190 million acquisition of DeltaTech represented a "medium-sized" transaction in terms of Sensata's acquisition strategy, he added.

Sensata, with U.S. headquarters in Attleboro, Mass., was once a unit of Texas Instruments Inc. before raising $569 million in its March 11, 2010, initial public offering - one of the largest IPOs in the U.S. that year. At the time, it produced a 170% gain on an original $985 million investment for sponsor Bain Capital LLC, which acquired it in a $3 billion leveraged buyout in 2006.

On Oct. 28, 2010, Sensata bought the automotive on-board sensor products business of Honeywell International Inc. for $140 million. It picked up Sensor-Nite Group Cos. for $325 million from Elex NV on June 15, 2011.

Shares of Sensata, which are listed on the New York Stock Exchange as ST, finished up 1.88%, at $48.28, on Monday. Shares have advanced more than 24% year to date, from $38.77.

The company generated $551.6 million in revenue during its first quarter ended March 31, up from $470.4 million the previous year. Ebitda climbed to $147.7 million, from $122.9 million, while its profit about doubled to $68.4 million, from $34.7 million.

Nixon Peabody LLP's Chris Keith and David Martland provided legal advice to Sensata on the transaction. Sensata didn't use any outside financial advisers.

Officials with DeltaTech and LittleJohn couldn't be reached on Monday.

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