Metaldyne Performance Group, an LBO'd producer of automobile powertrain and safety components, filed on Friday with the SEC to raise up to $150 million in an initial public offering.
Formation
Metaldyne Performance represents a consolidation of auto parts manufacturers bought by American Securities. The PE firm performed a secondary buyout of components maker HHI from KPS in October 2012. In December, it purchased Metaldyne for $820 million, a company that Carlyle took out of bankruptcy in 2009. The company acquired Grede in June 2014 from Wayzata Investment Partners and Black Diamond Capital Partners for about $800 million. The three businesses each contributed between 30% and 36% of fiscal 2013 revenue.
Business
Metaldyne Performance Group generates most of its revenue from forging automobile powertrain components, which includes the engine (28% of FY 2013 revenue), driveline (18%) and transmission (16%). Safety-critical components made up 25% of revenue. Its primary end market is light vehicle (76% of FY 2013 revenue), but also sells its products for commercial (12%) and industrial (9%) uses. Metaldyne's largest customers include Ford (14%), GM (7%), TRW Automotive (5%) and Linamar Fiat (5%). Over 80% of sales are in North America, while Europe makes up over 10%.
Financials
Historical revenue increased 17% to $1.2 billion for the six months ended June 29, 2014. About 8% is due to one month of Grede operations and the rest is from volume increases alongside higher North American auto production. Most raw material costs are passed through to customers. Gross profit margin increased 100 bps to 16% without the Grede segment. On a historical basis, Grede'e revenue fell 6% to $508 million during the 1H14 due to plant closures. Metaldyne Performance had $223 million of adjusted EBITDA ($290 million pro forma). At the end of June, its total debt was $2.0 billion.
The Plymouth, MI-based company, which was founded in 2005 and booked $2.2 billion in historical sales for the 12 months ended June 30, 2014, plans to list on the NYSE under the symbol MPG. BofA Merrill Lynch, Goldman Sachs, Deutsche Bank, Barclays, Credit Suisse and RBC Capital Markets are the joint bookrunners on the deal. No pricing terms were disclosed.
