Sensata Technologies Holding N.V. (NYSE:ST) Made A Deal with Madison to Buy Schrader International for A Total of $1 Billion

On the last trading day, August 18, 2014, Sensata Technologies Holding N.V. (NYSE:ST) disclosed that it has made a deal with Madison Dearborn Partners, a private investment firm, to buy Schrader group of Companies. The company further said that the deal price was set at $1 billion.

Schrader group of companies is a Denver-based venture that manufactures gauges, which monitor tire pressures. Last year, the company generated a total of $550 million in revenues. Schrader was acquired by Madison Dearborn back in 2012. The company purchased Schrader from Tomkins for a total of $505 million cash and some stake in the equity of the company.

The chief executive of Sensata Technologies Holding N.V. (NYSE:ST), Martha Sullivan, who also happens to be the president of the company, said that the acquisition deal would extend the operations of Sensata Technologies Holding N.V. (NYSE:ST) in the pressure sensing sector of the industry as well. The CEO further said that the company can now extend its hands in the rapidly growing sector of pressure sensor market.

Sensata Technologies Holding N.V. (NYSE:ST) disclosed that the acquisition price was set at around 10 times the value of earnings (before any tax, interest, amortization or depreciation deductions) that is estimated for the year 2015.

Moreover, the chief financial officer of Sensata Technologies Holding N.V. (NYSE:ST), Paul Vasington, said that company expects a dilutive of 13 cents to 16 cents for the year 2014; however it expects an accretion of 18 cents to 21 cents for the next year. The CFO further said that the accretion would reach around 50 cents to 55 cents after the integration and addition of debts and pay-downs. The company was confident that it will gain an extra 18 to 22 cents for the year 2015 when the business of the company will expand in the Chinese market.

Sensata Technologies Holding N.V. (NYSE:ST) is based in Netherlands. The company makes controllers and sensors for a number of industries and market sectors. The company was a Texas Instruments’ unit; however, in 2006, it was made private by Bain Capital and some other investors. Later on, in 2010, Bain Capital, which holds around 9 percent of the company’s stocks to date, made the company public.

Coming to the financing side, Morgan Stanley and Barclays have agreed to provide Sensata Technologies Holding N.V. (NYSE:ST) with the financing for the deal. Moreover, the law firms of Meagher & Flom, Arps, Skadden and Slate have advised Sensata Technologies Holding N.V. (NYSE:ST) on the acquisition deal.

Guggenheim Securities, Barclays and Kirkland & Ellis were the financial and legal advisors of Schrader International for the acquisition deal.

Coming to the stock prices of Sensata Technologies Holding N.V. (NYSE:ST), the company, on the last trading day, August 18, 2014, started its stocks at a price of $47.26 and closed at an increased price of $48.84. As far as the intraday range of company’s stocks is concerned, the figures are reported to be from $47.09 to $49.24. The company has a market capitalization of $7.77 billion with a price to earnings ratio of 32.35.

Shares of Sensata Technologies Holding N.V. (NYSE:ST) started Tuesday’s trading session at a value of $48.84; the stock’s total market cap is 8.25 B; its range over 52 weeks has been between 36.50 and 49.24 whereas the stock’s int. ownership is 100%.