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Bain Capital Makes Third Attempt at Buying TI Automotive

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Published on : Jan 05, 2015

Bain Capital Partners is making its third attempt to buy out TI Automotive, a British manufacturer of car parts. Bain Capital Partners is a American private equity firm started by Mitt Romney. The offer by Bain to TI Automotive is estimated at GBP1.2 billion. TI Automotive, which started its operations in Birmingham 96 years ago as Tube Investments makes parts for automobiles which includes brakes and fuel tank. The early trade history of TI Automotive can be traced back to supply of fuel lines to Model T by Ford.

This is Bain’s third attempt in the last three years. Recently, in December 2013 Bain dropped GBP970 million deal for TI Automotive due to dispute over pricing with Oaktree Capital, the hedge fund owners at TI Automotive.

After Duquesne Capital, the leader of the hedge fund consortium took over business, TI Automotive underwent a massive restructuring in 2009 due to drop in car sales as the global financial crisis impacted the company.

In 2011, TI Automotive received a bid for purchase from Bain, Carlye, and Pamplona Capital. However, the sale was called off due to failing economic conditions. In 2014, TI Automotive’s hedge fund owners got on board advisers from JP Morgan, Blackstone, and Deutsche Bank to take a fresh look at floatation of the company or its sale. This led to talk about merger with Cooper-Standard. However, this deal too never materialized.

To recuperate from drop in sale, Oaktree arranged for US$1.25 billion loan to provide for US$435 payout to stakeholders.