The Cypress Group announced yesterday that it would buy Dana Corp.’s automotive replacement parts business for $1.1 billion.
The acquisition gives the New York-based buyout firm control of one of the leading makers of brakes, car filters and other replacement parts in North America. Dana’s Automotive Aftermarket Group, which ownsbrands such as Wix filters and Raybestos brakes, generated nearly $2 billion in sales last year.
“What excited us about the Dana unit is its leading market position, strong brands, customer focus and top management team,” said Michael Finley, managing director of Cypress. “Those attributes have resulted in good cash flow for the business.
Cypress emerged as the leading contender in a heated bidding war for the Dana unit, which was put on the block in December. Cypress bested Washington D.C.-based rival Carlyle Group, which had been considered the frontrunner.
Deals in the auto parts sector have been revving up in recent years – largely driven by deal-hungry buyout firms hoping to generate above-market returns in the struggling sector. Last year, for example, Carlyle bought auto parts maker United Components, while Blackstone Group bought TRW Inc.
Before forming Cypress in 1994, the firm’s four founders previously worked together at Lehman Brothers where they managed that firm’s merchant banking portfolio, which included auto parts maker Lear Seating.