Sensata Technologies Holding NV’s share price up, to acquire Schrader for $1 billion

Sensata Technologies Holding NV, a Netherlands-based sensor and controls maker, revealed in a statement today that it has agreed the acquisition of Schrader International Inc. from Madison Dearborn Partners LLC. The deal, estimated at $1 billion, will reinforce Sensatas positions in the pressure sensor market, and is expected to add significant earnings in the years to come.

According to the statement of Sensata Technologies Holding NV, the deal is expected to be finalized by the end of 2014. When complete, about $0.21 could be added to Sensatas adjusted earnings per share in 2015. As much as $0.77 could be added in the next year.

“The acquisition of Schrader extends Sensatas leadership position in pressure sensing,” Martha Sullivan, CEO of Sensata, said in the statement. The deal “provides further access to a rapidly growing $2 billion low pressure sensor market where the largest current opportunity is in [tire pressure monitoring sensors].”

Denver-based Schrader is the global leader in TPMS, Sensata said. The technology alerts the driver of an under-inflated tire and is mandatory in the US. China is also moving towards implementing a pressure-monitoring rule for car tires, with Europe also advancing such legislature.

Sensata itself is a leader in the sensors and electronics controls market, and has been expanding its presence recently. Last month it acquiried DeltaTech Controls, which makes sensors and controls for heavy machinery, for $190 million.

Sensata Technologies Holding NV was 0.30% down to close at $46.17 per share on Friday, marking a one-year change of +23.78%, valuing the company at $7.77bn. According to CNN Money, 11 analysts offering 12-month price forecasts for Sensata Technologies Holding NV have a median target of $53.00, with a high estimate of $59.00 and a low estimate of $46.00. The median estimate represents a +14.79% increase from the last price of $46.17.