Automotive M&A Review

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Automotive M&A review Q2 2019 Financial Advisory Contents

Introduction 03 Highlights 04 Notable transactions 06 Intelligence 08 Statistics 09 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Introduction

Welcome to the Q2 2019 edition of Deloitte’s Automotive M&A review, the latest in a series of quarterly updates that provides an overview of relevant news and transaction activity in the Automotive sector.

We hope you enjoy the summary and find it both interesting and informative. If you have any questions, comments or would like to discuss the sector in more detail, please do not hesitate to get in touch.

Deloitte Financial Advisory - Industrials

This publication is an easy to digest summary of information sourced from publicly available and third party sources and has not been checked or verified in any way

03 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Highlights

Global automotive indices were volatile in Q2 2019, and European and North American indices finished the quarter down on Q1, despite some recovery in June. With the exception of Uber’s IPO, major transactional activity was muted

European and North American automotive indices were volatile R during the quarter and, despite initial gains, ended the period lower (Figure 1). The AsiaPac index followed a comparatively 115 steadier trajectory and was flat over the period. Key themes 110 continue to be sector consolidation, portfolio realignment, 105 new technologies, trading relationships and consumer demand. 100 95 Total announced M&A deal value in the period was $8.2bn (Figure 90 2), down on the previous quarter of $12.4bn. Nonetheless, three 85 deals were recorded with a transaction value over $1bn, including 80 TDR Capital’s $2.9bn offer for UK used vehicles marketplace BCA Apr-19 May-19 Jun-19 Marketplace. The equity markets enjoyed some recovery in capital Europe N.America AsiaPac issuance, including the much-anticipated IPO of Uber, which raised proceeds of $8.1bn.

5000 Figure 3 provides quarter-on-quarter multiples for a variety of automotive sub-sectors. Trading multiples had a mixed performance in the quarter. Share prices declined very slightly 2500 on average across the quarter (less than 1%), with the strongest 1500 performing sub-sectors being Automotive Sales (10%) and

Aftermarket (12%). Of the OEMs, Ford had a particularly strong $m quarter (17%) with a significant investment in the electric 750 vehicle space.

0 Tires Sales Chassis Exteriors Controls & Interiors & Diversiﬁed Electronics Powertrain Automotive Aftermarket

Europe N.America AsiaPac T

14.0

11.5x 12.0 11.0x 10.9x 11.0x 10.4x 10.7x 10.0x 10.2x 10.0 8.8x 8.6x

8.0 7.2x 6.7x 6.6x 6.6x 6.0x 6.0x 6.3x 6.2x 5.8x 5.8x 5.5x 5.5x 5.7x 5.6x 6.0 5.1x 5.1x 5.1x 5.1x 5.3x 4.8x 4.8x 5.1x 5.1x 4.4x 4.6x 4.0x 4.0

CY EV/EBITDA (times) 2.0

0.0 OEMs Chassis Controls & Diversified Interiors & Powertrain Tires Aftermarket Automotive Electronics Exteriors Sales Q318 Q418 Q119 Q219

Note: The multiples are derived from FactSet without adjustment and are dependent on FactSet’s analysis of the constituent companies’ financial performance. In the case of OEMs, FactSet may exclude certain financial assets from its calculation of enterprise value, which can lead to high multiples ¹ STOXX 600 Automobiles & Parts regional indices ² Multiples shown above are the median, current year (“CY”) EV/EBITDA multiple for a representative group of companies Source: FactSet, Deloitte analysis

04 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

OEMs Automotive sales The M&A highlight of the quarter was a deal that did not happen. BCA Marketplace, the UK used vehicles marketplace, received an FCA proposed a €33bn all-share merger with Renault which would offer from private equity operator TDR Capital that values BCA’s have seen the combined business ranked third globally in terms of equity at $2.4bn. The enterprise value under the offer equates to vehicle sales. FCA subsequently withdrew its proposal, stating that circa 12.5 times BCA’s reported adjusted EBITDA. “the political conditions in France do not currently exist for such a combination to proceed successfully”. UK car dealership Pendragon undertook an operational & financial review following poor trading, particularly in its used car division, Volkswagen successfully completed the Frankfurt and NASDAQ and operational issues. The business subsequently disposed of Stockholm listing of a 11.5% equity stake in Traton, its truck division two US JLR dealerships to Lithia Motors for $77m and will provide a that includes the Man and Scania brands. The transaction raised strategic update to investors in Q3. approximately $1.7bn for VW and valued Traton at $15.3bn, equivalent to nearly nine times 2018 EBIT. Telematics The theme of tire OEMs investing in the telematics sector Tesla, the EV specialist, confirmed many market commentators’ continued, with Michelin announcing the acquisition of Masternaut, expectations and raised $2.35bn via the issue of $750m of equity a leading European telematics provider. Masternaut operates and $1.6bn of convertible bonds. The funds will be used for “general primarily in France and the UK and manages over 220,000 mostly corporate purposes”. light utility vehicles under contract. Michelin cited benefits such as the accelerated development of its Services & Solutions business Battery for light vehicles, the potential for geographical expansion and Northvolt, the European battery start-up, undertook a capital the increased volume of data capture enabling greater services. raising to help construct the first phase of its battery factory in Consideration was stated as eight times 2018 EBITDA. northern Sweden. When complete, the factory will produce 16 gigawatt hours of lithium-ion batteries per year. Equity funding of Autonomous driving $1bn was invested by VW and BMW amongst others. Additional Apple acquired autonomous driving startup Drive.ai. Terms have debt capital was provided by the European Investment Bank not been disclosed although reports suggested consideration ($400m) and other lenders. In addition, Northvolt established a would be less than the $77m raised in venture capital to date. joint venture with VW to develop a 16GWh battery cell gigafactory in Lower Saxony, Germany. Renault, Nissan and Mitsuibishi have agreed to partner with Waymo, Alphabet’s autonomous vehicle unit, to explore driverless Daimler invested $100m for a 10 per cent equity stake in Sila mobility services. The partnership will involve establishing “alliance- Nanotechnologies, a Californian battery materials start-up. focused” joint venture companies in France and Japan. Sila, which raised a total of $170m, focuses on chemistries that enable higher energy densities and claims that its materials can Ford agreed to invest $500m in Rivian, an EV start-up that has improve the density of batteries by 20 per cent. Its products have developed its own battery pick-up truck. Amazon is an existing applications in a variety of end markets including electric vehicles. investor in the venture.

Brakes TuSimple, a San Diego based autonomous truck company closed a The Dutch braking systems manufacturer, Chassis Brakes $200m Series D financing. TuSimple is undertaking a mail delivery International, which was put up for sale by KPS Capital in January trial for the US Postal Service between Phoenix and Dallas. 2019, was sold to Hitachi Automotive Systems. Terms were not disclosed, although KPS reportedly made a six times return on Ride-hailing its investment. CBI was established by KPS in 2012 to acquire the Uber become the second ride-hailing company to publicly list its automotive foundation brakes business of Robert Bosch. shares, following in the footsteps of Lyft’s Q1 IPO. The business raised $8.1bn in new capital at a valuation of $82bn, pricing at the Controls & Electronics bottom end of its reported price range. At the end of the quarter, Veoneer, the Swedish safety systems specialist, raised $600m in Uber’s shares were trading marginally below their issue price. equity and convertible loan notes for working capital purposes following weak trading.

Source: Company announcements, press

05 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Notable transactions

Transaction Sector Date Description Detail BCA Marketplace Automotive 20-Jun TDR Capital acquired BCA Marketplace, the listed UK- Value: $2,901m Target Sales based second-hand car auctioneer and owner of the EV/Rev: 0.7x TDR Capital ‘WeBuyAnyCar.com’ brand. BCA Marketplace is one of the EV/EBITDA: 12.4x Acquirer UK’s largest auction and remarketing business, selling over one million vehicles per annum Chassis Brakes Brakes 19-Jun Hitachi Automotive, the automotive components and systems Value: $772m Target subsidiary of Hitachi, acquired Chassis Brakes International, EV/Rev: 0.7x Hitachi Automotive one of the world’s largest manufacturers of automotive EV/EBITDA: 11.8x Acquirer foundation brakes and components. The transaction is in line with Hitachi Automotive’s strategy to enhance its core business areas of powertrain, chassis and safety systems Pritex Interiors 29-May French industrial conglomerate Saint-Gobain acquired UK- Value: n/d Target based acoustic-insulation company Pritex. Saint Gobain’s EV/Rev: n/d Saint Gobain stated intention is to combine Pritex’s thermo-acoustic EV/EBITDA: n/d Acquirer capabilities with its existing automotive glazing expertise to develop differentiated noise control and lightweight products for electric vehicles GuardKnox Controls & 28-May The venture fund of automotive technology company Investment: n/d Investee Electronics Faurecia invested in GuardKnox, an Israeli automotive cyber- Implied value: n/d Faurecia security provider. The acquisition is expected to enable Investor Faurecia to reinforce data security in its connected car technologies Ravin.ai Autonomous 21-May Ravin.ai, an Israel and UK-based startup developing AI to Investment: $4m Investee Driving autonomously inspect vehicles for damage, has secured a Implied value: n/d Various $4m seed investment round led by Pico Venture Partners Investor and including Shell Ventures. The company is developing technology to detect and analyse damage via standard cameras such as smartphones or CCTV cameras Quadric.io Autonomous 21-May Tier one automotive supplier Denso led a series A funding Investment: $15m Investee Driving round in Quadrico.io, a startup that is developing machine Implied value: n/d Various learning software for autonomous vehicles and robots. Investor The purpose of the investment is to help fund Quadric.io’s development of edge processing units, seen as potential foundations for automated driving Masternaut Telematics 16-May French tire maker Michelin acquired Masternaut, the Value: n/d Target provider of onboard telematics solutions for vehicle fleet EV/Rev: n/d Michelin management and monitoring, operating primarily in the UK EV/EBITDA: 8.0x Acquirer and France. Michelin is seeking to accelerate its telematics offering in Europe Rimac Automobili OEM 15-May Hyundai and Kia invested €64m and €16m respectively in Investment: $90m Investee Croatian EV sportscar developer Rimac Automobili. The Implied value: n/d Hyundai/Kia companies will work together to develop two models of Investor performance-oriented electric vehicles by 2020 XTRONIC Controls & 09-May Schaeffler sought to strengthen its software and electronics Value: n/d Target Electronics capabilities through the acquisition of Xtronic. Xtronic EV/Rev: n/d Schaeffler provides services and solutions in a range of areas, including EV/EBITDA: n/d Acquirer automated driving applications, electric mobility, functional safety, as well as methods, tools and test systems Bond Mobility Alternative 02-May Denso’s New Mobility Group led a $20m series A funding Investment: $20m Investee Mobility round in Bond Mobility, a station-less, high-speed eBike Implied value: n/d DENSO service company. The investment was made by DENSO’s New Investor Mobility Group, which includes Toyota and Softbank

Notes: EV/Rev and EV/EBITDA refer to trailing financials Source: Company announcements, press

06 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Transaction Sector Date Description Detail AxleTech/Vantage Power Powertrain 29-Apr Allison Transmission Holdings, the global manufacturer Combined value: $132m Target of medium and heavy-duty fully automatic transmissions, EV/Rev: n/d Allison Transmission acquired AxleTech’s electric vehicle systems division and EV/EBITDA: n/d Acquirer London-based Vantage Power. Both acquisitions are expected to advance Allison’s electrification propulsion technologies for commercial vehicles Drivy Car Sharing 24-Apr San Francisco-based car sharing platform Getaround Value: $300m Target acquired French rival Drivy for $300m as it seeks to build a EV/Rev: n/d Getaround business in Europe. Drivy has an estimated two and a half EV/EBITDA: n/d Acquirer million users across Europe Uber ATG Autonomous 23-Apr Toyota, Denso and Softbank’s investment fund invested $1bn in Investment: $1.0bn Investee Driving Uber Advanced Technologies Group, Uber’s entity focused on Implied value: n/d Various developing and commercialising automated ride-hailing services Investor Sila Nanotechnologies Battery 16-Apr Daimler invested $100m in return for a 10% stake in Sila Investment: $100m Investee Nanotechnologies, a battery materials developer founded Implied value: $1.0bn Daimler by one of Tesla’s first employees. Sila’s battery materials Investor purportedly outperform existing lithium-ion technologies Xevo Software 03-Apr Lear Corporation, the automotive seating and electronic Value: $320m Target systems company, acquired Tier 1 automotive software EV/Rev: n/d Lear Corporation supplier Xevo. Lear is aiming to enhance its capabilities in EV/EBITDA: n/d Acquirer software, telematics and connected car technology

07 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Intelligence

M&A Teklas Kaucuk, a Turkish automotive component maker, has Volkswagen may seek to put Renk, its manufacturer of transmissions, mandated advisers for a potential sale. The manufacturer of on the market in Autumn 2019. A Reuters report suggested that the heating and cooling systems may be valued at €600m to €700m, business will be marketed to a number of private equity operators as according to reports. well as industry peers. UK-based car retailer Vertu Motors is interested in acquiring Toyota is considering investing up to $550 million in Chinese ride- counterparts across all its business lines. Interesting assets hailing giant Didi Chuxing in an effort to expand its business in China. include premium and volume car retailers, as well as commercial Toyota and Didi are reportedly looking to set up a joint venture to vehicle and motorbike dealerships. Dealerships selling vehicles offer mobility services including ride-sharing. manufactured by companies Vertu Motors has a relationship with are the focus. Shareholders voted to reorganise the Daimler Group, clearing the way for the automaker to separate its car and van business from its Czech automotive parts manufacturer ATEK has mandated truck and bus business into two legally independent entities. advisers to find a buyer for the family-owned company. ATEK produces plastic and rubber products as well as providing Belgium-based company D’Ieteren, which is active in the automotive assembly services. import market and provides auto glass repair services, is looking to deploy over $1bn in capital on a single acquisition. Suitable targets Spanish group CIE Automotive is preparing a 2020-2025 strategic will be based in Europe with a strategy to expand services further plan that will be marked by “very ambitious growth”, much of which into Europe or Asia. will come from further acquisitions. The automotive components group made the announcement the day after closing the purchase The automotive interiors unit of the Belgium-based Recticel of the car roofing business of US-based Inteva for circa $760m. has reportedly attracted several suitors. The division produces CIE went on to acquire two Mexico-based machining components instrument panels and door pieces. businesses for $65m.

Horizon Global, a leading manufacturer of branded towing and Capital Raising trailering equipment, has launched a sales process for its Asia-Pacific Byton, a Chinese electric vehicle startup, is aiming to raise about business segment. $500m in its latest fundraising round from investors, according to a newswire report. Axcel, the Danish private equity firm, has plans to exit Mountain Top Industries with an auction due to commence after the summer. Reports suggest current EBITDA is around $30m. Mountain Top produces accessories for pick-up trucks and car manufacturers for factory assembly.

Italian brakes manufacturer Brembo is preparing to make a major acquisition to beef up its presence in electronics, software and data management. wejo, a UK developer of a trading platform for connected car data, is looking at acquisitions to expand its offering and distribution network.

Nucap, a Spanish firm specialising in brake systems and components for the automotive industry, is being marketed. The process is in early stages, but Nucap has reportedly already attracted initial offers from private equity.

Magna International, the US-based automobile parts manufacturer, is looking for growth and is open to buys according to reports. Magna recently acquired a manufacturer of tail lights based in Italy.

Source: Company announcements, press

08 Statistics

09 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

M&A transactions

TV Implied EV/ Date Target Country Focus Acquirer EV/Rev $m EV $m EBITDA

24-Jun-19 MYOUNG SHIN Co., Ltd. South Korea Diversified MS Autotech Co., Ltd. 22.6 36.9 0.3x -

24-Jun-19 INZI AMT Co. Ltd. South Korea Diversified INZI DISPLAY Co., Ltd. 14.4 14.4 - - 20-Jun-19 BCA Marketplace Plc United Kingdom Automotive Sales TDR Capital LLP 2,901.3 2,901.3 0.7x 12.4x 19-Jun-19 Chassis Brakes International BV Netherlands Powertrain Hitachi Automotive Systems Ltd. 771.8 771.8 0.7x - 06-Jun-19 Motorcycle Distributors Australia Pty Ltd. Australia Automotive Sales KTM Sportmotorcycle GmbH 9.3 12.6 - - 29-May-19 Zhongce Rubber Group Co., Ltd. China Tires Hangcha Group Co., Ltd. and others 1,020.2 1,786.3 0.5x - 28-May-19 Alexander Dennis Ltd. United Kingdom Chassis NFI Group, Inc. 369.3 369.3 0.5x 7.1x Jackspeed Corp. Ltd. /Jackspeed 27-May-19 Jackspeed Corp. Ltd. /Jackspeed Business/ Singapore Interiors & Exteriors 34.9 34.9 - - Business//Management/ 17-May-19 Tata International DLT Pvt Ltd. India Chassis ADV Partners Ltd 19.6 19.6 - - 16-May-19 HK Motors Co., Ltd. South Korea Aftermarket HK Automotive 5.4 5.4 - - Beijing Prestolite e-Propulsion Technology 11-May-19 China Powertrain Dana Electric Holdings BVBA 47.9 95.7 4.0x - Co. Ltd.

Changzhou Dongfeng Xinchen Power 10-May-19 China Powertrain Dongfeng Motor Co., Ltd. 7.4 14.8 421.2x - Machinery Co. Ltd.

08-May-19 AxleTech International, Inc. United States Chassis Meritor, Inc. 175.0 175.0 0.7x - Roechling Automotive Germany / 07-May-19 Germany Interiors & Exteriors Kasai (Germany) GmbH 13.5 13.5 - - Wolfsburg-Hattorf Factory Pendragon Plc /Jaguar Land Rover 02-May-19 United States Automotive Sales Lithia Motors, Inc. 37.9 37.9 - - California Dealership Bus/

01-May-19 Air Ride Technologies, Inc. United States Chassis Fox Factory Holding Corp. 14.0 14.0 - -

Shanghai SIIC Transportation Electric Controls & 26-Apr-19 China Huayu Automotive Systems Co., Ltd. 65.9 219.5 - - Co., Ltd. Electronics Zhejiang Ruili Group Co., Ltd.; Sorl Auto 26-Apr-19 SORL Auto Parts, Inc. China Diversified 33.8 242.9 - - Parts, Inc. /Private Group/ 16-Apr-19 Federal-Mogul Motorparts LLC United States Aftermarket KTRI Holdings, Inc. 27.3 27.3 - - Controls & 16-Apr-19 Omron Automotive Electronics Co., Ltd. Japan NIDEC Corp. 892.8 892.8 2.8x - Electronics 08-Apr-19 Eaton Ltda. Brazil Diversified Aços Macom Indústria e Comércio Ltda. 5.7 5.7 - - 05-Apr-19 Automotive Holdings Group Ltd. Australia Automotive Sales A. P. Eagers Ltd. 1,211.9 1,342.2 0.3x 15.2x Controls & 03-Apr-19 Setrab AB Sweden Zhejiang Yinlun Machinery Co., Ltd. 7.5 7.5 - - Electronics 02-Apr-19 Sime Kubota Sdn. Bhd. Malaysia Automotive Sales Kubota Corp. 6.3 12.0 - - 02-Apr-19 WABCO India Ltd. India Powertrain ZF Friedrichshafen AG 432.5 1,729.9 3.9x 26.8x Controls & 01-Apr-19 Stoneridge, Inc. /Pollak Bus/ United States Standard Motor Products, Inc. 40.0 40.0 - - Electronics Equity offerings

Offer Proceeds Company Country Description Stock Exchange Offer Type Date ($m)

27-Jun-19 TRATON SE Germany Automotive OEM Frankfurt IPO 1,537.4 23-May-19 Veoneer, Inc. United States Automotive safety electronics NYSE Follow-On 420.0 Advanced driver assistance London Stock 21-May-19 AB Dynamics Plc United Kingdom Follow-On 45.1 systems Exchange 21-May-19 LiqTech International, Inc. Denmark Diesel particulate filters NASDAQ Follow-On 16.1 21-May-19 Carvana Co. United States Online car dealing platform NYSE Follow-On 273.0 09-May-19 Uber Technologies, Inc. United States Ride-hailing NYSE IPO 8,100.0 02-May-19 Tesla, Inc. United States Automotive OEM NASDAQ Follow-On 750.0 18-Apr-19 Nanjing Chervon Auto Precision Technology Co. Ltd. China Automotive components Shanghai IPO 73.0

Notes: M&A Transactions captures announced (but not necessarily completed) transactions with disclosed values greater than $5m. Transaction value differs to Implied Enterprise Value where 100% control not acquired. TV = Transaction Value; EV = Enterprise Value; Rev = Revenue; EV/Rev and EV/EBITDA = trailing multiples. Equity offerings captures offerings with gross proceeds greater than $10m Source: FactSet

10 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Listed Automotive Companies

Trading Comparables

Summary Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

$m $m H C F H C F % %

OEMs - Europe 37,804 99,639 2.1 2.0 1.8 9.7 9.8 8.9 16.4% 7.3%

OEMs - N. America 38,884 94,029 1.1 1.0 0.9 13.6 11.6 9.3 9.6% 13.8%

OEMs - AsiaPac 22,599 36,342 1.0 1.0 0.9 16.4 7.4 6.7 4.1% 33.9%

OEMs - Total 27,935 57,402 1.3 1.2 1.1 14.3 8.6 7.5 7.7% 27.0%

Chassis 2,937 4,683 0.6 0.6 0.6 5.0 4.8 4.5 12.2% 20.4%

Controls & Electronics 3,515 4,321 1.4 1.3 1.2 13.9 8.1 6.8 14.0% 32.5%

Diversified 8,515 9,499 0.8 0.7 0.7 5.9 5.5 5.0 12.4% 14.5%

Interiors & Exteriors 3,315 3,631 0.9 0.8 0.8 6.3 5.6 5.1 13.4% 13.5%

Powertrain 4,792 5,990 1.1 1.1 1.0 7.2 6.6 6.2 14.9% 8.8%

Tires 10,365 12,909 1.2 1.2 1.1 6.5 5.8 5.4 18.8% 19.1%

Automotive Aftermarket 3,663 4,309 1.8 1.6 1.5 20.3 11.2 10.6 11.7% 28.7%

Automotive Sales 3,032 6,376 0.6 0.5 0.5 11.4 10.0 9.6 3.1% 25.8%

Mean 13,946 28,261 1.1 1.1 1.0 10.9 7.9 7.1 11.5% 20.4%

Median 6,654 7,938 1.1 1.1 1.0 10.5 7.8 6.7 12.3% 19.7%

Trading Comparables

Automotive OEMs Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

$m $m H C F H C F % %

Europe

Aston Martin 2,954 3,679 2.6 2.4 1.8 12.7 10.1 7.0 23.5% nmf

BMW 48,139 159,726 1.5 1.4 1.4 8.1 11.0 10.0 13.1% nmf

Daimler 59,480 205,759 1.1 1.1 1.0 7.5 10.9 10.3 9.8% 4.8%

Ferrari 30,581 31,710 8.2 7.6 7.0 25.1 22.3 19.4 34.0% nmf

PSA 22,481 16,444 0.2 0.2 0.2 1.7 1.8 1.7 10.7% 9.0%

Renault 18,580 61,665 0.9 1.0 0.9 8.2 8.9 8.6 10.7% nmf

Volkswagen 85,797 272,714 1.0 1.0 1.0 5.8 6.8 6.5 14.5% 9.9%

Volvo 34,418 45,413 1.1 1.0 1.1 8.6 6.9 7.7 14.9% 5.4%

North America

FCA 21,774 24,827 0.2 0.2 0.2 2.4 1.8 1.7 11.3% 9.2%

Ford 40,088 162,275 1.0 1.0 1.0 14.2 12.6 12.7 8.2% 25.5%

GM 54,651 139,348 0.9 1.0 1.0 7.7 8.9 9.2 10.7% 6.8%

Tesla 39,021 49,664 2.3 1.9 1.6 30.1 23.2 13.5 8.4% nmf

Notes: EV = Enterprise Value; H = historical year; C = current year; F = forecast year; EPS growth = growth per annum in earnings per share between historical and forecast periods; nmf = no meaningful figure. Market Cap and EV as of 30 June 2019 Source: FactSet

11 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Listed Automotive Companies

Trading Comparables

Automotive OEMs Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

$m $m H C F H C F % %

AsiaPac

BAIC 1,582 4,401 0.2 0.2 0.2 1.1 1.0 0.9 17.6% 15.3%

Brilliance 5,582 5,791 8.7 9.0 7.9 nmf nmf nmf -6.9% 13.3%

BYD 19,275 28,413 1.5 1.3 1.1 12.9 11.6 10.6 11.0% 17.7%

Changan 4,360 2,588 0.3 0.3 0.2 nmf 11.0 8.7 2.3% 84.1%

Dongfeng Motor 2,340 4,938 0.3 0.3 0.3 160.6 10.1 10.8 3.2% nmf

GAC 14,800 13,142 1.2 1.3 1.2 18.3 16.1 13.7 8.0% 4.0%

Geely Auto 15,588 13,854 0.9 0.9 0.8 5.7 5.5 5.0 15.8% 2.2%

Great Wall 9,757 11,298 0.8 0.7 0.7 7.9 7.5 6.8 9.6% 0.1%

Honda 47,592 93,986 0.6 0.7 0.6 4.7 8.2 7.7 8.0% 10.6%

Hyundai 30,622 78,598 0.9 0.9 0.9 14.5 11.6 10.7 7.5% 72.8%

JAC 1,463 1,770 0.2 0.2 0.2 nmf 5.2 4.7 4.4% nmf

JMC 1,796 748 0.2 0.2 0.1 12.1 3.9 3.2 4.0% 244.8%

Kia 15,011 14,365 0.3 0.3 0.3 5.4 4.3 4.1 7.0% 36.2%

Mazda 6,686 6,093 0.2 0.2 0.2 3.8 3.5 3.1 5.2% 14.5%

Mitsubishi 7,335 4,979 0.2 0.2 0.2 3.1 3.0 2.6 7.0% nmf

NIO 1,969 1,416 1.9 0.8 0.4 nmf nmf nmf -71.0% nmf

Nissan 30,777 93,942 0.9 0.9 0.9 8.5 13.0 11.5 7.1% 3.5%

SAIC 44,464 61,368 0.5 0.5 0.4 14.4 11.5 9.1 4.0% 3.2%

Subaru 19,417 11,811 0.4 0.4 0.4 4.2 3.2 3.0 11.7% 28.3%

Suzuki 23,313 23,314 0.7 0.6 0.6 5.3 5.0 4.6 12.7% 11.7%

Tata Motors 7,619 14,760 0.3 0.3 0.3 4.2 3.0 2.6 10.6% nmf

Toyota 207,137 343,027 1.2 1.2 1.2 8.8 10.1 9.6 12.2% 14.5%

Zotye 1,286 1,257 0.6 nmf nmf nmf nmf nmf nmf nmf

Mean 27,935 57,402 1.3 1.2 1.1 14.3 8.6 7.5 7.7% 27.0%

Median 19,275 16,444 0.9 0.8 0.7 8.0 8.6 7.7 9.7% 11.2%

12 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Chassis $m $m H C F H C F % %

Aisin Seiki 10,368 17,524 0.5 0.5 0.5 4.6 4.3 3.9 10.9% 3.0%

American Axle 1,435 4,986 0.7 0.7 0.7 4.4 4.2 4.2 16.2% nmf

Dana 2,870 5,334 0.7 0.6 0.6 5.8 4.8 4.6 12.3% 9.4%

Georg Fischer 3,923 4,211 0.9 1.0 1.0 8.4 8.4 7.8 12.5% nmf

Gestamp 3,415 7,304 0.8 0.7 0.7 7.0 6.0 5.5 11.7% 14.4%

Iochpe Maxion 891 1,642 0.7 0.6 0.6 5.8 5.4 4.9 11.6% 32.0%

JOST Werke 511 608 0.7 0.7 0.7 5.8 5.3 5.4 13.0% nmf

NHK Spring 1,932 1,743 0.3 0.3 0.3 3.6 3.6 3.4 7.5% 62.6%

NSK 5,071 6,595 0.7 0.8 0.8 5.7 6.4 5.8 12.0% nmf

Showa 1,080 799 0.3 0.3 0.3 2.1 2.2 2.0 14.2% 1.0%

Unipres 813 768 0.3 0.3 0.3 2.2 2.2 2.1 12.3% nmf

Mean 2,937 4,683 0.6 0.6 0.6 5.0 4.8 4.5 12.2% 20.4%

Median 1,932 4,211 0.7 0.6 0.6 5.7 4.8 4.6 12.3% 11.9%

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Controls & Electronics $m $m H C F H C F % %

Amara Raja 1,561 1,557 1.6 1.5 1.3 11.3 9.8 8.7 14.8% 16.2%

Aptiv 20,841 25,711 1.8 1.7 1.6 11.3 10.9 9.9 16.0% 19.2%

Autoliv 6,150 7,910 0.9 0.9 0.8 6.3 6.3 5.7 14.2% 88.7%

Autoneum Holding 660 1,057 0.5 0.5 0.4 7.0 6.3 5.1 7.2% 2.0%

CUB Elecparts 1,011 1,025 7.9 6.6 5.3 22.6 16.7 13.9 39.4% 23.9%

Exide Industries 2,550 2,356 1.1 1.4 1.3 5.0 9.9 8.9 14.0% 10.6%

Gentex 6,290 5,888 3.2 3.1 3.0 9.6 9.8 9.5 32.1% 4.1%

Hanon Systems 5,322 7,307 1.4 1.2 1.1 12.7 10.3 8.8 11.4% 22.2%

Hella 5,514 6,059 0.8 0.8 0.7 5.6 4.7 5.4 16.2% 1.6%

Gentherm 1,409 1,481 1.4 1.4 1.4 10.7 10.0 8.6 14.4% 52.0%

Hu Lane 238 248 1.9 1.9 1.7 7.9 8.5 7.0 22.5% 4.4%

Iron Force 220 182 1.3 1.3 nmf 7.8 6.2 nmf 20.2% nmf

Koito 8,731 6,804 0.9 0.9 0.8 5.5 5.1 4.7 16.8% 3.1%

Kongsberg Automotive 333 721 0.6 0.5 0.5 5.8 5.3 5.0 10.0% 59.5%

Leoni 527 1,758 0.3 0.3 0.3 5.6 15.2 5.5 2.0% nmf

Melexis 2,789 2,789 4.3 4.8 4.2 13.9 19.0 14.2 25.5% nmf

13 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Listed Automotive Companies

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Controls & Electronics $m $m H C F H C F % %

Motherson Sumi 5,757 7,326 0.8 0.7 0.7 9.5 8.2 7.0 8.8% 24.6%

NOK 2,643 3,070 0.5 0.5 0.5 4.8 4.3 3.9 11.5% 181.4%

Stanley Electric 4,428 3,633 0.9 0.9 0.9 4.5 4.5 4.2 20.2% 1.2%

Stoneridge 905 964 1.1 1.1 1.1 10.1 10.2 8.5 11.2% 5.1%

Sumitomo 10,573 15,965 0.5 0.5 0.5 5.5 5.5 5.2 9.9% 0.0%

Sumitomo Riko 817 1,560 0.4 0.4 0.4 4.3 4.7 4.4 7.8% nmf

Tenneco 634 6,302 0.5 0.4 0.3 7.1 4.1 3.8 8.5% 128.4%

TI Fluid Systems 1,311 2,276 0.6 0.6 0.5 4.4 4.1 4.1 13.9% 23.6%

Tokai Rika 1,600 1,158 0.2 0.2 0.2 2.4 2.4 2.3 9.9% 11.0%

Tung Thih Electronic 171 215 0.9 0.9 nmf 159.6 nmf nmf nmf nmf

Veoneer 1,928 1,352 0.6 0.7 0.6 nmf nmf nmf -14.9% nmf

Mean 3,515 4,321 1.4 1.3 1.2 13.9 8.1 6.8 14.0% 32.5%

Median 1,600 2,276 0.9 0.9 0.8 7.0 6.3 5.6 14.0% 16.2%

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Diversified $m $m H C F H C F % %

CIE 3,673 5,213 1.5 1.3 1.2 8.7 7.5 6.7 17.3% nmf

Continental 29,177 34,606 0.7 0.7 0.6 5.7 5.1 4.6 13.3% nmf

Denso 33,778 34,059 0.7 0.7 0.6 5.8 5.2 4.9 12.7% 14.8%

Global PMX 331 397 2.8 2.5 2.3 10.6 9.4 8.0 27.0% 18.3%

Hyundai Mobis 19,333 12,639 0.4 0.4 0.4 5.4 4.9 4.6 8.1% 16.4%

Magna 16,063 20,750 0.5 0.5 0.5 4.9 5.1 5.0 10.0% 3.9%

Martinrea 686 1,400 0.5 0.5 0.5 4.0 3.7 3.5 13.1% 13.5%

Modine 726 1,141 0.5 0.5 0.5 5.7 5.3 5.0 9.8% 4.5%

Ningbo Joyson 3,083 5,612 0.7 0.6 0.6 7.5 6.2 5.3 9.5% 16.6%

S&T Motiv 550 360 0.4 0.4 0.4 4.4 4.3 3.9 9.8% 5.0%

SKF 8,402 9,652 1.0 1.0 1.0 7.2 7.1 7.1 14.6% nmf

Sogefi 170 572 0.3 0.3 0.3 2.4 2.7 2.6 11.7% 46.4%

Toyoda Gosei 2,590 3,002 0.4 0.4 0.4 4.4 4.2 3.9 9.1% 14.8%

Valeo 7,515 11,170 0.5 0.5 0.5 4.5 4.2 3.8 11.9% 15.9%

Visteon 1,656 1,913 0.6 0.7 0.6 6.5 7.8 6.0 8.4% 4.5%

Mean 8,515 9,499 0.8 0.7 0.7 5.9 5.5 5.0 12.4% 14.5%

Median 3,083 5,213 0.5 0.5 0.5 5.7 5.1 4.9 11.7% 14.8%

14 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Tires $m $m H C F H C F % %

Bridgestone 30,311 30,610 0.9 0.9 0.9 5.5 5.3 5.0 17.0% 4.5%

Cooper 1,582 1,740 0.6 0.6 0.6 4.8 4.8 4.2 12.6% 46.8%

Goodyear 3,557 10,246 0.7 0.7 0.7 5.3 5.5 4.9 12.1% nmf

Hankook 3,753 4,853 0.8 0.8 0.8 4.4 4.5 4.2 17.8% 7.8%

Michelin 22,933 27,312 1.1 1.0 1.0 5.8 5.2 4.9 19.1% 14.5%

Nokian 4,354 4,292 2.4 2.3 2.2 8.2 8.1 7.6 28.4% nmf

Pirelli 6,065 11,310 1.9 1.8 1.7 12.0 7.4 6.8 24.8% 21.6%

Mean 10,365 12,909 1.2 1.2 1.1 6.5 5.8 5.4 18.8% 19.1%

Median 4,354 10,246 0.9 0.9 0.9 5.5 5.3 4.9 17.8% 14.5%

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Interiors & Exteriors $m $m H C F H C F % %

Adient 2,270 5,572 0.3 0.3 0.3 8.1 7.0 5.8 4.8% nmf

Faurecia 6,284 7,243 0.4 0.3 0.3 3.5 3.0 2.7 11.4% 8.5%

Fuyao Glass 8,315 8,707 2.9 2.7 2.5 10.1 9.5 8.4 28.1% 0.2%

Grammer 470 871 0.4 0.4 0.4 7.0 4.6 4.4 7.9% 58.5%

Huayu Automotive 10,253 9,077 0.4 0.4 0.4 6.7 5.8 5.3 6.6% nmf

Lear 8,671 9,744 0.5 0.5 0.4 4.4 4.6 4.4 10.1% 6.5%

Macauto 201 207 1.0 1.0 0.9 7.4 7.1 6.0 14.2% 10.2%

Minth 3,097 3,067 1.6 1.5 1.3 7.8 6.6 5.7 23.0% 15.2%

Nifco 2,747 2,717 1.0 1.0 1.0 6.6 6.3 6.1 15.8% 4.4%

Nihon Flush 310 273 1.2 nmf nmf 7.4 nmf nmf nmf nmf

Ningbo Jifeng 739 650 2.1 1.8 1.6 10.6 9.2 8.0 19.7% 12.7%

Plastic Omnium 3,854 4,931 0.6 0.5 0.5 4.9 4.6 4.3 11.0% nmf

Polytec 222 376 0.5 0.5 0.5 5.5 4.7 4.3 11.1% 19.9%

Stabilus 1,171 1,380 1.3 1.3 1.2 6.5 6.6 6.2 19.1% nmf

Toyota Boshoku 2,509 2,298 0.2 0.2 0.2 2.6 2.7 2.5 6.4% 11.2%

TS Tech 1,931 981 0.3 0.3 0.3 2.1 2.1 2.1 11.9% 1.2%

Mean 3,315 3,631 0.9 0.8 0.8 6.3 5.6 5.1 13.4% 13.5%

Median 2,390 2,507 0.6 0.5 0.5 6.7 5.8 5.3 11.4% 10.2%

15 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Listed Automotive Companies

Trading Comparables

Automotive Suppliers Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

Powertrain $m $m H C F H C F % %

BorgWarner 8,701 10,382 1.0 1.0 1.0 6.0 6.2 5.9 16.2% 1.3%

Brembo 3,906 4,378 1.5 1.4 1.3 8.4 7.4 6.9 19.2% 8.2%

Cummins 26,985 28,739 1.2 1.2 1.2 9.6 7.1 7.9 16.5% 6.2%

Delphi 1,759 3,206 0.7 0.7 0.7 4.3 5.0 4.6 13.7% nmf

ElringKlinger 395 1,331 0.7 0.7 0.6 7.4 6.4 5.6 10.5% 5.5%

Exedy 1,042 1,154 0.4 0.4 0.4 3.2 3.1 2.9 13.8% 9.7%

Garrett Motion 1,145 2,503 0.7 0.8 0.7 4.2 3.9 3.8 19.1% nmf

Haldex 271 366 0.7 0.6 0.6 8.3 5.7 6.3 11.1% 10.7%

Hota Industrial 885 1,096 4.7 5.0 4.3 18.6 18.8 15.9 26.4% 3.2%

JTEKT 4,296 5,863 0.4 0.4 0.4 4.8 4.8 4.5 8.7% 35.1%

Keihin 1,093 947 0.3 0.3 0.3 2.4 2.4 2.2 11.8% nmf

Knorr Bremse 17,872 19,064 2.5 2.4 2.3 14.4 12.5 11.9 19.2% 12.0%

Linamar 2,437 3,997 0.7 0.7 0.6 4.6 4.3 4.3 15.2% 0.4%

Mando 1,210 2,638 0.5 0.5 0.5 6.5 6.4 5.9 7.8% 23.8%

Musashi 869 1,574 0.7 0.7 0.6 5.2 4.9 4.6 13.6% 8.9%

Nexteer 3,121 2,866 0.7 0.7 0.7 4.6 4.4 4.1 16.3% nmf

SAF-HOLLAND 528 821 0.6 0.5 0.5 6.9 6.1 5.8 8.8% 13.1%

Schaeffler 1,175 4,665 0.3 0.3 0.3 1.9 2.0 1.8 14.4% 0.1%

SHW 141 193 0.4 nmf nmf 4.5 nmf nmf nmf nmf

Toyota Industries 18,175 27,228 1.3 1.3 1.2 9.3 10.8 10.2 12.0% 5.4%

WABCO 6,794 7,094 1.9 1.8 1.8 11.0 11.5 11.0 16.1% 3.2%

Weifu High-Tech 2,626 1,679 1.3 1.3 1.3 11.8 5.5 5.2 23.7% 3.6%

Mean 4,792 5,990 1.1 1.1 1.0 7.2 6.6 6.2 14.9% 8.8%

Median 1,485 2,752 0.7 0.7 0.7 6.2 5.7 5.6 14.4% 6.2%

16 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Trading Comparables

Automotive Aftermarket Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

$m $m H C F H C F % %

D'Ieteren 2,574 890 0.2 0.2 0.2 6.3 4.9 4.8 3.4% 110.2%

Dorman 2,870 2,829 2.9 2.7 2.5 14.2 13.2 12.3 20.3% 10.7%

Fox Factory 3,149 3,195 5.2 4.4 4.0 29.6 22.0 19.6 19.9% 16.2%

Genuine Parts 15,129 18,216 1.0 0.9 0.9 13.1 12.1 11.6 7.8% 5.8%

Halfords 575 681 0.5 0.5 0.5 5.2 5.4 5.2 8.5% 7.6%

Horizon Global 90 524 0.6 0.6 0.6 72.3 9.5 7.5 6.3% nmf

LKQ 8,355 12,326 1.0 1.0 0.9 9.9 9.2 8.5 10.5% 31.1%

Motorcar Parts 403 573 1.2 nmf nmf 22.8 6.8 nmf nmf nmf

Standard Motor 1,014 1,116 1.0 1.0 0.9 8.6 10.6 9.7 9.0% 33.3%

Thule 2,473 2,735 3.9 3.5 3.3 20.5 17.9 15.8 19.8% 14.6%

Mean 3,663 4,309 1.8 1.6 1.5 20.3 11.2 10.6 11.7% 28.7%

Median 2,524 1,926 1.0 1.0 0.9 13.7 10.0 9.7 9.0% 15.4%

Trading Comparables

Automotive Sales Market Cap EV EV/Revenue EV/EBITDA EBITDA margin EPS growth

$m $m H C F H C F % %

AutoNation 3,741 10,162 0.5 0.5 0.5 11.5 10.6 11.2 4.6% nmf

BCA 2,416 2,875 0.7 0.8 0.7 13.4 12.1 11.2 6.5% 33.3%

CarMax 14,361 28,774 1.6 1.5 1.4 36.9 20.1 19.2 7.3% 8.9%

Carvana 3,063 4,047 2.1 1.1 0.7 nmf nmf nmf -4.9% nmf

Group 1 1,516 4,439 0.4 0.4 0.4 9.1 10.9 10.7 3.5% 14.2%

Inchcape 3,224 3,186 0.3 0.3 0.3 5.5 5.7 5.5 4.7% 133.3%

Lithia 2,655 6,317 0.5 0.5 0.5 12.2 13.2 12.8 3.9% 3.0%

Lookers 246 381 0.1 0.1 0.1 3.2 3.0 3.0 2.0% 3.4%

Pendragon 293 455 0.1 0.1 0.1 2.7 4.2 3.0 1.9% nmf

Penske 3,957 12,521 0.5 0.5 0.5 16.3 15.4 15.0 3.6% 1.0%

Sonic 725 3,170 0.3 0.3 0.3 10.5 10.7 10.8 3.0% 30.5%

Vertu 188 189 0.1 0.0 0.0 3.8 3.7 3.5 1.3% 4.2%

Mean 3,032 6,376 0.6 0.5 0.5 11.4 10.0 9.6 3.1% 25.8%

Median 2,535 3,617 0.4 0.4 0.4 10.5 10.7 10.8 3.6% 8.9%

17 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Deloitte Financial Advisory

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18 Automotive M&A review Q2 2019 | Deloitte Financial Advisory

Notes

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