Sensata expects to sell senior notes for purchase of sensing portfolio

By Sara Rosenberg

New York, July 30 – Sensata Technologies Holding NV obtained a financing commitment for its acquisition of the sensing portfolio of Custom Sensors & Technologies Inc. “with the intention of financing the deal primarily with senior notes prior to closing”, company officials said in a conference call on Thursday.

The financing commitment totals $1 billion.

Bank of America Merrill Lynch provided the debt commitment.

The interest expense implied is about a 5.5% rate, officials added in the call.

Leverage will likely be around 4 times, but strong free cash flow will allow rapid debt repayment and delevering.

Under the agreement, Sensata is buying the sensing portfolio in a transaction with a total enterprise value of $1 billion.

The acquisition includes the Kavlico, BEI, Crydom and Newall product lines and brands and includes sales, engineering and manufacturing sites in the United States, the United Kingdom, Germany, France, China and Mexico.

Closing is expected in the fourth quarter of 2015 or early 2016, subject to customary regulatory approvals.

Sensata is an Attleboro, Mass.-based supplier of sensing, electrical protection, control and power management services.

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