Bain Capital Said to Halt Talks With TI Automotive on Price Gap

Bain Capital Partners LLC decided not to pursue an acquisition of TI Automotive because it couldn’t agree with the auto-parts maker on price, people with knowledge of the matter said.

The buyout firm was in advanced talks to buy Auburn Hills, Michigan-based TI as recently as last week, said one of the people, who asked not to be named because the talks were private. Bain submitted a bid close to $2 billion that TI’s owners considered too low, the person said.

Bain was the front-runner as of last week after some potential buyers walked away, two of the people said. TI, founded almost a century ago, is seeking a price in the mid-$2 billion range, one of the people said. If talks with Bain remain stalled, TI’s advisers will try to interest other potential buyers, said one of the people familiar with the process.

The company hired JPMorgan Chase & Co. and Deutsche Bank AG to start a sale process in August, people familiar with the situation said then.

Charlyn Lusk, a spokeswoman for Bain Capital, declined to comment, and Frank Buscemi, a spokesman for TI, didn’t return a call seeking comment on the sale process. Representatives for JPMorgan and Deutsche Bank didn’t return calls seeking comment.

Bain’s decision marks its second failed attempt to acquire the auto-parts maker, which once supplied fuel lines to Ford Motor Co.’s Model T and traces its roots to 1919. In late 2011, Boston-based Bain was one of the firms that bid for TI before that deal was pulled because of worsening financial conditions.

Car Components

TI generated about $3 billion in revenue last year, with more than one-fourth coming from North America, a spokesman for the company said previously. It has about $400 million in earnings before interest, taxes, depreciation and amortization, according to one of the people familiar with the situation.

At that amount, Bain’s offer represented a multiple of about 5 times TI’s Ebitda. That compares with a multiple of 4.9 in American Industrial Partners’ $375 million acquisition of rubber-tire maker Carlisle Transportation Products Inc., announced last month, according to data compiled by Bloomberg.

TI, which makes components for cars and trucks, was acquired by a group of funds led by Oaktree Capital Group LLC (OAK) and Duquesne Capital Management LLC in a 2007 debt restructuring. The company is chartered in Britain and headquartered in Michigan.

To contact the reporters on this story: Jodi Xu in New York at jxu205@bloomberg.net; David Welch in New York at dwelch12@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

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