BorgWarner to Acquire Remy International to Boost Revenue - Analyst Blog
In an attempt to enhance its revenues, BorgWarner Inc. BWA signed an agreement to acquire rotating electrical components producer, Remy International, Inc. REMY. The company will pay $29.50 for each share of the latter. This will amount to total purchase consideration of $1.2 billion. The acquisition is expected to close in the fourth quarter of 2015, subject to customary closing conditions.
The buyout is part of BorgWarner’s efforts to attain annual revenues of $15 billion by 2020. The company expects the acquisition to enhance its position in the fast growing powertrain electrification business. It also anticipates the combined company to have a higher growth rate due to various cost synergies and other benefits. The acquisition is expected to augment BorgWarner’s revenues from the first year itself.
Remy International has key technologies and operations in 10 countries spanning 5 continents. The company generated $1.2 billion in revenues in 2015. It had 6,600 employees as of Dec 31, 2014.
Both BorgWarner and Remy International currently carry a Zacks Rank #3 (Hold).
Better-ranked automobile stocks include The Goodyear Tire & Rubber Company GT and Pep Boys - Manny, Moe & Jack PBY. Pep Boys currently sports a Zacks Rank #1 (Strong Buy), while Goodyear carries a Zacks Rank #2 (Buy).
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