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August 18, 2014
10:55 EDTSTSensata climbs higher after agreeing to buy Schrader International for $1B
Shares of Sensata Technologies (ST), an industrial technology company involved in the sensor and control market, are climbing higher after announcing plans to buy Schrader International, a privately held company that makes tire pressure monitoring sensors. WHAT'S NEW: Sensata's Sensata Technologies B.V. unit has agreed to acquire Schrader from Madison Dearborn Partners for $1B. Schrader, which is based in Denver, Colorado, and employs 2,500 people globally, is expected to generate about $550M in revenue this year, according to Sensata. The agreement is subject to regulatory approval and is expected to close in Q4. Sensata Chief Financial Officer Paul Vasington expects Schrader to be 13c-16c dilutive to adjusted earnings per share in 2014 and 18c-21c accretive in 2015. Sensata sees Schrader providing 50c-55c of accretion after integration and debt pay-down and provide an additional 18c-22c accretion when China ramps adoption of TPMS. WHAT'S NOTABLE: During the company's conference call discussing the Schrader transaction, Sensata said that it aims to double revenue from 2012-2017. The company said that the acquisition of Schrader strengthens the firm's ability to penetrate the $80B Total Sensor market. Due to the deal, the company said that combined business cash flow will pay down debt and return it to a target net leverage ratio of two times to three times within eighteen months. Sensata intends to finance the acquisition through issuance of debt. The company expects its investments so far this year will add $1 of incremental earnings growth to shareholders. Sensata noted that the acquisition will create "significant" shareholder value. The company says that it expects the agreement to incur $4M-$8M of integration costs annually for next three years beginning in FY15. PRICE ACTION: During morning trading, shares of Sensata were up $2.92 or 6.32% to $49.09.
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March 23, 2015
06:03 EDTSTU.S. Multi-Industry sector downgraded to Neutral at Barclays
Barclays downgraded the U.S. Multi-Industry space to Neutral from Overweight saying rising headwinds could limit share upside to mid-single-digit levels in 2015, with only slight improvement in 2016. The firm believes the credit cycle is peaking and views the U.S. Dollar strength along with lower oil prices as headwinds. Concurrent with sector rating change, Barclays downgraded Dover (DOV), Grainger (GWW), Xylem (XYL) and WESCO (WCC) to Equal Weight from Overweight. It also upgraded Tyco (TYC) to Overweight from Equal Weight and Lennox (LII) to Equal Weight from Underweight, calling both defensive names in the space. The firm is also "comfortable" owning General Electric (GE), Honeywell (HON), Sensata (ST) and HD Supply (HDS) at current levels. It prefers waiting for pullbacks to buy shares of 3M (MMM).

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