Icahn, Federal-Mogul trying to sell Fel-Pro for $1.5 billion, report says
Carl Icahn’s Federal-Mogul Holdings LLC is considering a sale of its Fel-Pro engine parts business, seeking about $1.5 billion if it pursues a deal, people familiar with the matter told Bloomberg.
Fel-Pro, which makes engine gaskets and sealants, has about $180 million in earnings before interest, taxes, depreciation and amortization, or Ebitda, said the people, who asked not to be identified because the matter is private. Icahn is seeking about eight times Ebitda, which implies a desired sale price of about $1.5 billion, they said.
Icahn is working with XMS Capital Partners as an adviser on the sale process, one of the people said. There are private equity firms looking at the company, but they may not way to pay eight times its earnings, the people said.
Representatives of Federal-Mogul and XMS didn’t respond to requests for comment.
If Icahn can get his price for Fel-Pro, it would boost his returns for Federal-Mogul, which he took private this year. Icahn acquired Federal-Mogul debt before its 2001 bankruptcy and later converted it to equity. He then bought the last of the shares he didn’t own and folded the company into Icahn Enterprises LP in January.
Federal-Mogul bought Fel-Pro for $720 million in 1998. It’s now part of Federal-Mogul’s Motorparts division, which includes several well-known aftermarket brands such as Champion spark plugs, Anco windshield wipers and Wagner brakes. Federal-Mogul last year called off a plan announced in 2014 to spin off the Motorparts unit.
Icahn would have to fetch a good price for Fel-Pro to part with it, one of the people said. He has a growing presence in auto-parts retailing and believes he can get good value by owning aftermarket parts brands and selling the products in his own retail stores, the person said.
Icahn Automotive Group, a separate unit from the Motorparts division, acquired car-service chain Precision Auto Care Inc. in July. He has been adding more auto parts retail and service businesses, including buying Pep Boys for $1 billion last year.
With its Pep Boys and Auto Plus chains, Icahn Automotive has 1,200 stores and 20 distribution centers in the U.S., according to the company’s website.
Federal-Mogul ranks No. 46 on the Automotive News list of the top 100 global suppliers with estimated worldwide sales to automakers of $5.16 billion in 2016.
Fuente: Automotive News