Shares of Delphi Automotive PLC DLPH gained 0.06% on Dec 18 after the company announced that it has completed the acquisition of HellermannTyton Group – a leading global manufacturer of cable management solutions – for approximately £1.07 billion ($1.85 billion). HellermannTyton Group PLC will now be part of Delphi Automotive’s Electrical/Electronic Architecture segment.
This buyout will expand Delphi Automotive’s product portfolio and help it capitalize on the growing connected car trend. It will also strengthen the company’s position in the electrical architecture market and open up opportunities to expand in HellermannTyton’s non-automotive end markets, like aerospace, defense, alternative energy and mass transit.
The transaction is expected to boost Delphi Automotive’s earnings by 15 cents per share, excluding one-time integration expenses, from 2016. It is also anticipated to provide synergies of around $50 million annually by the end of 2018 through sourcing savings, supply chain savings and leveraging the combined product portfolio.
Delphi Automotive regularly undertakes acquisitions and alliances to enhance its technological capability, increase operating scale, augment client base and expand geographically. In Jul 2015, Delphi Automotive acquired software company Ottomatika and made a strategic investment in 3D LiDAR sensing leader – Quanergy. Light Detection and Ranging (LiDAR) scanners are used for sensing objects and executing digital mapping, surface modeling and distant imaging. This investment will enhance the company’s active safety and automated driving capabilities and strengthen its advanced driver assistance system applications. In addition, in July, the company announced an investment in Tula Technology, developer of software that provides cost-efficient fuel economy gains in cylinder deactivation technology.
Delphi Automotive currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and Fox Factory Holding Corp FOXF. All these stocks currently carry a Zacks Rank #2 (Buy).
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