Apollo-backed ABC Technologies to acquire TI Fluid Systems in £1.04bn deal

In a landmark automotive deal, ABC Technologies, supported by Apollo Management IX, has announced the acquisition of TI Fluid Systems for £1.04 billion. The UK-based car fluid storage manufacturer accepted the offer of 200 pence per share in cash, representing a 54.5% premium to its 90-day average share price before the offer period began. This valuation underscores a significant boost in TI Fluid Systems’ enterprise value, now pegged at £1.83 billion.

The deal, which is set to be executed via a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006, will mark a transformative shift in the automotive supply chain landscape. ABC Technologies, a leading manufacturer of technical plastics for the automotive industry, plans to leverage the acquisition to expand its global footprint, enhance its product portfolio, and strengthen its position as a supplier to original equipment manufacturers (OEMs) and tier-one suppliers worldwide.

Strategic rationale for the acquisition

ABC Technologies outlined its reasons for pursuing TI Fluid Systems, emphasising the complementary nature of the two companies’ offerings. TI Fluid Systems’ expertise in fluid storage, thermal management, and delivery systems aligns seamlessly with ABC Technologies’ capabilities in producing lightweight, high-performance automotive components. This synergy is expected to foster innovation, operational efficiency, and sustainability across the combined entity.

The acquisition also provides ABC Technologies with access to a broader customer base, including major automotive OEMs and tier-one suppliers. By integrating operations, the two companies aim to strengthen their market position and unlock growth opportunities in the evolving automotive landscape, particularly in the electric vehicle (EV) segment.

Industry analysts have highlighted the strategic timing of the deal, given the global automotive sector’s ongoing transition to EVs and sustainable solutions. They noted that TI Fluid Systems’ propulsion-agnostic product portfolio and recent focus on thermal management solutions make it a valuable asset for ABC Technologies.

TI Fluid Systems’ perspective and shareholder recommendation

For TI Fluid Systems, the acquisition comes amid industry challenges, including reduced global light vehicle production and increased competition. The company has been navigating these hurdles through its “Take-the-Turn” strategy, launched in 2021, which focuses on capturing opportunities in the growing EV market. Despite this, the board recognised the uncertainties surrounding the strategy’s execution and the potential risks posed by market volatility.

The board unanimously recommended the offer, stating that it provides shareholders with immediate and certain value at a significant premium. TI Fluid Systems’ chair, Tim Cobbold, explained that while the company remains confident in its long-term strategy, the cash offer reflects its current strengths while mitigating external risks. Experts from Goldman Sachs and Peel Hunt advised the board on the financial terms, deeming them fair and reasonable.

Implications for the automotive sector

The acquisition highlights the increasing consolidation within the automotive supply chain as companies seek scale and innovation to remain competitive in a rapidly changing market. By combining their resources, ABC Technologies and TI Fluid Systems are well-positioned to address the challenges of electrification, sustainability, and shifting global demand.

While regulatory and shareholder approvals are still pending, the deal is expected to be finalised in the first half of 2025. Upon completion, the combined entity aims to deliver enhanced value to stakeholders, including customers, employees, and investors.