Jonathan F. Foster to Chair Automotive Investing Conference
Capital Roundtable, May 20, 2014
Private Equity Investing In Automotive Supplier Companies: With the Auto Industry Restructured & Production Strong, Higher Levels of PE And M&A Activity Are Expected
Tuesday, June 17, 2014, 8:00 am – 5:00 pm
At a Private Venue on Fifth Avenue In Midtown New York City
The financial strength of automotive suppliers continues to improve. So these companies are attracting more and more attention from middle-market PE firms.
Consolidations are producing growing opportunities among Tier 2 and Tier 3 suppliers, including such segments as metal stamping, plastic molding, and die casting. Tier 1 suppliers in such segments as telematics are finding they can command higher premiums.
There are many good reasons for this heightened interest. Consider these three major growth drivers —
- The automotive industry continues to recover from bankruptcy and restructuring. In North America, auto production has grown to a 13-year high of nearly 17 million units per year. And China has gone from virtually zero cars to becoming the world’s biggest market, with 19 million new units per year at present and projected output of 30 million.
- Changing fuel efficiency standards are changing the game. The Corporate Average Fuel Economy (aka “CAFE”) standards are creating a new industry focus on alternative fuels and lighter weighting — bringing on new business for parts suppliers.
- Use of telematics inside vehicles is exploding. Technology to monitor systems. Safety sensors. Wireless connectivity for devices. Video and audio capabilities. As cars become digital wonders, the leadership often takes place on the supplier side.
Expanded production is an important catalyst for more transactions down the road. With another year or two of consistent production growth, companies will have to look for external acquisitions in order to keep growth rates up.
As regulations change and toughen, the supplier companies who are the most nimble and forward-thinking are tomorrow’s likely winners. For example, the ability to work with lightweight materials is a new mandatory. Automakers are focusing on design and marketing as their core competencies — not components — so outsourcing is here to stay.
And while technology advances continue to differentiate newer vehicles, the power is often located within the suppliers to OEMs who have many of the specialized skills that are viewed as their domain. What’s more, many Tier 1 suppliers are increasing their own R&D spend on electronics to claim their own definitive niches.
In addition, globalization by automotive OEMs is rapidly accelerating, with a push toward modular architecture and fewer vehicle platforms. In particular, Ford is reducing its number of platforms by 50 percent. This leads to the ability to use the same products and parts throughout the world, helping reduce costs for automotive suppliers.
Among the many positive indicators —
- New car sales have accelerated over the past 18 months.
- From last year through 2015, the auto industry is expected to introduce 260 new models and redesigns — over 70 percent growth from 2010.
- 25 percent of all cars will have components made from lightweight aluminum instead of steel in the next 10 years.
- Electronic content is projected to grow to 50 percent of total value per vehicle in the next decade.
- Over the past three years, about half of all private equity transactions within the automotive sector took place among supplier companies.
Here are 6 important reasons you should Register Now for this encore Capital Roundtable conference, “Private Equity Investing in Automotive Supplier Companies” —
- Recognize which segments of automotive supplier companies will be in the highest demand during 2014-15.
- Understand how CAFE standards and other government regulations will impact the sector in the months to come.
- Hear why touch-screen controls and other advanced electronics gadgets are fostering growth in telematics suppliers.
- Discover how growing globalization among OEMs is providing new opportunities to automotive supplier companies.
- Find out how middle-market investors are assessing valuations in the automotive supplier marketplace.
- Learn when and how to exit an automotive supplier company investment.
As chair of this conference, we’re delighted to welcome Jonathan F. Foster, managing director of Current Capital LLC in New York City – a middle-market private equity investing and management services firm that focuses on the industrial and business services industries.
Jon has spent over 25 years primarily as an investment banker, private equity investor, and corporate director at major firms, and founded Current Capital in 2008. He is a director of two automotive suppliers — publicly traded Lear Corp., a global leader in seating and electrical systems, and TI Automotive, a global leader in fuel systems.
From 2007 until 2008, Jon served as a managing director and co-head of diversified industrials and services at Wachovia Securities. From 2005 until 2007, he served as executive vice president — finance and business development of Revolution LLC. From 2002 until 2004, he was a managing director of The Cypress Group, a private equity investment firm and from 2001 until 2002, he served as a senior managing director and head of industrial products and services mergers & acquisitions at Bear Stearns & Co.
From 1999 until 2000, Jon served as the executive vice president, chief operating officer, and chief financial officer of Toysrus.com Inc. Previously he was with Lazard, primarily in mergers and acquisitions, for over ten years, including as a managing director. Jon is also a director of Masonite International Corp., Chemtura Corp., and Berry Plastics as well as a trustee of the New York Power Authority. He was previously a member of the board of directors of Smurfit-Stone Container Corp.
Jon earned a bachelor’s degree in accounting from Emory University, a master’s degree in accounting and finance from the London School of Economics, and has attended the Executive Education Program at the Harvard Business School.
This conference on June 17th will bring you three panel discussions led by our chair and featuring shared insights from top PE professionals, plus one informative keynote presentation and two informal chats. You will hear real-world perspectives, lessons learned, and industry outlooks, plus insights on managing current portfolio companies.
You will also hear about notable middle-market industry deals including —
- Audax Private Equity portfolio company AAMP of America’s acquisition of Armour Automotive Ltd., a designer and distributor of branded connectivity and audio solutions for the in-vehicle entertainment and communication markets.
- HGGC’s acquisition of AutoAlert, a provider of cloud-based data mining analytics and dealer portfolio management solutions to North American automotive retail dealerships.
- TPG Capital’s acquisition of The Warranty Group, a provider of extended warranty programs and related services, from Onex Corp.
- Tower Three Partners’ recent funding for The Paslin Co., a maker of robotic assembly lines for OEM auto companies.
- The successful sale by Sterling Group and Current Capital of Stackpole International, a leading automotive supplier of highly-engineered oil pumps and powdered metal components, to Crestview Partners.
- Kinderhook Industries’ portfolio company Tectum Holdings Inc.’s acquisition of Laurmark Enterprises, a maker of hard composite folding tonneaus.
- OMERS Private Equity’s acquisition of Caliber Collision Centers, one of America’s largest non-franchised paint and body repair services, from ONCAP.
By attending this Capital Roundtable conference, you’ll be well poised to act on the very best middle-market deal opportunities of 2014. We’ll answer questions such as —
- What makes the automotive supplier companies space so attractive for middle-market PE investors today?
- Where should automotive supplier companies investors be looking for the best opportunities of 2014 and 2015?
- How can first-time investors in the automotive supplier companies space avoid traps and pitfalls?
- What are the different automotive supplier company investment strategies that leading firms are using, and which are most successful?
- What are the individual parts segments that tend to have the longest life cycles, and thus less risk?
- How are lenders approaching deals with automotive supplier companies and what factors are behind their decisions?
- What are the metrics and valuation guidelines that can help you judge a middle-market automotive supplier company deal?
- What are the misconceptions about middle-market automotive supplier investing — and what is the reality?
- What are the best practices of managing automotive supplier portfolio companies?
The day’s agenda includes ample time to let you —
- Meet fellow attendees and featured speakers
- Enhance your personal database with valuable connections
- Share both ideas and business cards
- If you’re an attorney or advisor — meet new potential clients
- If you work as an executive search professional — meet potential prospects
This conference is being produced by The Capital Roundtable, America’s leading conference organization focusing on “need-to-know” information for professionals in the middle-market private equity community. For more information about The Capital Roundtable’s 30 annual conferences and other events and programs, please visit www.capitalroundtable.com.
Chaired By: Jonathan F. Foster, Managing Director, Current Capital LLC
Hosted By: Burt Alimansky, Chairman & CEO, The Capital Roundtable
Jack Butler, Executive Vice President, Hilco Global
Kevin Cramton, Chief Executive Officer, CARDONE Industries
Jeffrey M. Forlizzi, Senior Investment Analyst, Silver Point Capital LP
David S. Gellman, Managing Director, FdG Associates LP
Evan Hershberg, Managing Director, ONCAP Management Partners LP
Kenneth Kloner, Global Head–Automotive Practice, UBS Investment Bank
Timothy D. Leuliette, President & CEO, Visteon Corp.
Jonathan Lewinsohn, Senior Managing Director, Centerbridge Partners LP
Glenn A. Mercer, Principal, Glenn Mercer Automotive LLC
Justin E. Mirro, Managing Director, RBC Capital Markets Corp.
Brett Ponton, Chief Executive Officer, American Driveline Systems Inc.
Alexander M. Rose, Principal, Crestview Partners LP
Don Runkle, Executive Chairman, EcoMotors
David B. Walker, Managing Director, J. P. Morgan Chase & Co.
Edward Witz, Managing Director, Barclays Capital Inc.
Ira Wolfson, Managing Director, Rothschild Inc.
Steven Zelin, Senior Managing Director, Blackstone Group LP