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Bain Capital to stop acquisition talks with TI Automotive due to price disagreement- sources

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November 20
10:55 PM 2013

Sources told Bloomberg that Bain Capital Partners has decided not to proceed with its planned acquisition of TI Automotive because of a price disagreement. One of the people with knowledge about the deal said the talks were already in the advanced stages to buy the auto parts maker last week. He said that Bain's nearly USD 2 billion offer was deemed too low for the owners of TI Automotive. The people spoke on the condition of anonymity as the talks were private.

Two of the sources said buyout firm Bain was seen as the frontrunner last week when some potential buyers backed out of the bidding. Established nearly a hundred years ago, one of the people said that the Auburn Hills, Michigan-based IT Automotive was putting the price tag for the company in the mid-USD 2 billion range. If the acquisition talks with Bain will continue to stall, the advisers of TI Automotive will try to find other interested buyers for the company, revealed one of the people familiar with the transaction. Boston-based Bain Capital previously made a bid to acquire TI Automotive in 2011.

Citing a company spokesman, Bloomberg reported that TI posted revenues of USD 3 billion last year. One fourth of the revenues came from North America. One of the sources said earnings before interest, taxes, depreciation and amortization or EBITDA reached USD 400 million. This places the offer of Bain at a multiple of 5 times the EBITDA of TI, according to a Bloomberg report.

TI Automotive manufactures parts and components for trucks and cars. Oaktree Capital Group and Duquesne Capital Management led the acquisition of TI through debt restructuring in 2007.

Earlier sources said TI had commenced the sale process in August and hired JPMorgan Chase & Co and Deutsche Bank to manage the sale.

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