Gentherm acquires Shotgun Fund backed Etratech for $81.3M

Gentherm Incorporated (NASDAQ: THRM has acquired Etratech Enterprises Inc. and its Hong Kong subsidiary for approximately US $64 million or CDN $81.33 million in cash.

Sellers include SF Fund Limited Partnership, SF Fund Limited Partnership II, Michael Desnoyers (President & CEO), and Michael Lamontagne (EVP).

Angle Advisors, LLC acted as the exclusive investment banking advisor to Etratech in completing this transaction. Minden Gross LLP, McHugh Whitmore LLP, and Cassels Brock & Blackwell LLP acted as legal counsel to Etratech and individual sellers. McMillan LLP acted as legal counsel to Gentherm.

Founded in 1989, Etratech specializes in the design, development and manufacture of advanced electronic controls and control systems for major multinational companies. Etratech serves Original Equipment Manufacturers (OEMs) and other manufacturing firms with a total solution that extends far beyond traditional electronic manufacturing services (EMS). Etratech employs more than 400 people worldwide with manufacturing facilities in Canada and China.

Etratech estimates revenues of approximately CDN $77 million or US $61 million. The purchase price of US $64 million represents approximately 8.5x EBITDA based on trailing 12-months EBITDA at the time of closing.

Etratech’s management team will continue to lead the company, which will integrate into Gentherm’s Electronics Business Unit. Etratech will continue operations at their headquarters in Burlington, Ontario, Canada, with manufacturing in Canada and China.

“We believe that growing our existing electronics capabilities is critical to our success in the broad spectrum of markets in which we participate,” said Gentherm President and CEO, Daniel R. Coker. “The acquisition of Etratech will add new, innovative electronics products and capabilities in our core automotive and medical markets. This will diversify our product portfolio and manufacturing capabilities in new and important areas. We are very excited to add Etratech to an already outstanding electronics business and team.”

“Etratech is dedicated to innovation, exceeding customers’ expectations and providing total customer satisfaction,” said Desnoyers. “I believe that with Gentherm, we’ve found a perfect fit for our global electronics engineering and manufacturing business.”

“The Shotgun Fund, as a selling shareholder, board member, and strategy and growth adviser to Etratech is proud to have worked with Michael and the company,” said Larry Klar of The Shotgun Fund. “We are confident in Etratech’s future success as part of Gentherm.”

Northville, Michigan based Gentherm is a global developer and marketer of innovative thermal management technologies for a broad range of heating and cooling and temperature control applications. Gentherm has over 13,000 employees in facilities in the United States, Germany, Canada, China, Hungary, Japan, Korea, Macedonia, Malta, Mexico, United Kingdom, Ukraine, and Vietnam.

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.