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Federal-Mogul Signs Definitive Agreement To Purchase Significant Portion Of Honeywell Friction Business

Federal-Mogul Corp. recently announced that its European subsidiaries entered into a definitive purchase agreement to acquire certain business assets of the Honeywell automotive and industrial brake friction business, including two recently established manufacturing facilities in China and Romania.
By Shop Owner Staff
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Federal-Mogul Corp. recently announced that its European subsidiaries entered into a definitive purchase agreement to acquire certain business assets of the Honeywell automotive and industrial brake friction business, including two recently established manufacturing facilities in China and Romania. Honeywell Friction Material business is headquartered in Glinde, Germany, and employs more than 2,000 associates globally. The transaction is subject to customary approvals from regulatory authorities and other stakeholders where required. The parties anticipate closing the transaction during the second half of 2014.

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“This acquisition accelerates Federal-Mogul’s long-term strategy to strengthen its core product lines, including its global friction portfolio for both original equipment and aftermarket customers. We believe this transaction will generate significant synergies, which will create substantial value for all stakeholders,” stated Carl Icahn, chairman of the board of Federal-Mogul.

“Honeywell’s recognized braking technology and its restructured manufacturing footprint make the acquisition a solid addition to our existing global friction business,” added Kevin Freeland, CEO, Federal-Mogul Vehicle Components. “We expect to combine the Federal-Mogul and Honeywell brake businesses to realize significant synergies in all elements of the business. Our customers in all segments and regions will benefit from the transaction as we will be able to provide them with the best of both companies.”

The Honeywell business will substantially strengthen the manufacturing and engineering technology footprint of Federal-Mogul’s brake platform with enhanced manufacturing capacity and capability. The combined business will better serve global customers, both OE and aftermarket, with cost-competitive and innovative leading-edge solutions, according to Federal-Mogul.

Federal-Mogul today supplies an extensive line of automotive and heavy-duty original equipment and aftermarket brake components. The company sells the Wagner, Ferodo and Necto brake friction product lines in the global automotive aftermarket. Federal-Mogul is among the first brake friction companies to offer low- and zero-copper brake formulations for original equipment customers, and recently launched low copper brake pads in the aftermarket as well.

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When Your Shop Is Worth Much More Than You Thought

Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.

By Art Blumenthal
Leveraging more than 30 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Art is a member of IBBA (International Business Brokers Association, Inc.). For more information, or to initiate a no-obligation confidential consultation, visit www.art-blumenthal.com.
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Case Study: Owner of San Francisco-based Import Service Shop Delighted to Discover Just How Valuable His Business is to Qualified Buyers
I sometimes share case studies of the clients I have been able to assist in my role as an aftermarket business broker and provider of intermediary and advisory services. I do that when I think the story will provide a reader in similar circumstances with new insights or helpful information.
In the case of Cowden Automotive, Inc., I acted in a consulting capacity assisting the owner and his broker in valuing the business, creating a marketing plan, finding a qualified buyer, and arranging financing for the sale.
Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.
Needless to say, delivering that kind of good news to a shop owner is a rewarding experience. Discovering that the sale of his business would result in his retirement nest-egg being substantially larger than he had ever thought was a fitting tribute to someone who had spent his entire working career as a busy automotive service shop owner.

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