Delphi Automotive To Sell Thermal Business To MAHLE GmbH For About $727 Mln

(RTTNews) - Delphi Automotive PLC (DLPH) has agreed to sell its wholly-owned thermal business to MAHLE GmbH for around $727 million cash, subject to closing adjustments, representing an implied EV/LTM EBITDA multiple of about 9.5x. The transaction may close in the third quarter of 2015. Proceeds from the transaction would be used to fund growth initiatives, including acquisitions and share repurchases.

Delphi and MAHLE also inked a separate letter of intent to sell Delphi's stake in Shanghai Delphi Automotive Air-Conditioning System Co., Ltd. The transaction proceeds would be in addition to the $727 million paid for the wholly-owned operations.

"This agreement represents a great outcome for both Delphi and our Thermal division," said Rodney O'Neal, Delphi's chief executive officer and president. "The transaction positions Delphi with a more focused high-growth product portfolio that addresses the trends of safe, green and connected. The acquisition of the business by MAHLE, a leading global supplier of thermal systems, ensures continued industry-leading service to our customers and stability for our employees."