BorgWarner, a Michigan-based powertrain solutions company, has entered into a definitive agreement to acquire Remy International Inc., an Indiana-based producer of rotating electrical components.
BorgWarner says that with key technologies and operations in 10 countries on five different continents, Remy is strongly positioned to benefit from global growth. As of Dec. 31, 2014, Remy employed 6,600 people and, for the fiscal year, 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.’
Under the terms of the agreement, 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 says it has identified purchasing efficiencies, redundant public company expenses, other cost synergies and numerous opportunities to accelerate growth through the combined business.
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 U.S. and abroad. The deal is expected to close in the fourth quarter of this year.