Standard Motor Products (SMP) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition creates a global aftermarket leader with enhanced presence in North America and Europe, expanding European sales to 20% of total sales from 4%.

• Expands product portfolio into powertrain-neutral and EV-specific categories, supporting future mobility trends.

• Both companies have complementary product portfolios and similar business models, operating mainly in different geographies.

• Strong cultural alignment and experienced management teams are expected to facilitate integration and growth.

• Enhances customer and geographic diversity, leveraging Nissens' strong European footprint and local market expertise.

Financial terms and conditions

• Purchase price is $388 million (€360 million) in cash, representing a 7.5x EBITDA multiple including $8–12 million in run-rate cost synergies.

• Transaction financed with existing cash and amended credit facilities, with committed financing from J.P. Morgan, Bank of America, and Wells Fargo.

• Net debt at closing expected to be less than 3.5x EBITDA, targeting less than 2x by end of 2026.

• Nissens has annual revenues of $260 million with a mid-teens EBITDA margin.

• Transaction expected to be immediately accretive to GAAP EPS in the first full year, with double-digit ROIC.

Synergies and expected cost savings

• $8–12 million in run-rate cost synergies expected within 24 months, with additional revenue synergy opportunities.

• Cost savings to come from supply chain optimization, joint sourcing, and operational improvements.

• Significant cross-selling opportunities anticipated, though not yet quantified, with potential for product line expansion in both directions.

• Operational excellence and improved performance expected through collaboration and best practices.