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BorgWarner Inks Deal to Acquire Sevcon for Around $200M

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BorgWarner Inc. (BWA - Free Report) has announced that it has inked a definitive deal to acquire Gateshead, U.K-based electrical engineering company Sevcon, Inc. It is expected that Sevcon’s electrification capabilities will complement the Michigan-based BorgWarner’s power electronics capacity used for providing electrified propulsion solutions.

The anticipated enterprise value of the deal is around $200 million. The deal is likely to be completed in fourth-quarter 2017, subject to satisfaction of certain customary closing conditions.

BorgWarner is a leading manufacturer of powertrain products for major automakers. Its products include four-wheel-drive and all-wheel-drive transfer cases (primarily for light trucks and sport utility vehicles or SUVs), as well as automatic transmission and timing chain systems. For BorgWarner, this acquisition is likely to be accretive, as it supports the strategy of supplying necessary technology for all types of propulsion systems.

BorgWarner has outperformed the Zacks categorized Automotive - Original Equipment industry in the last three months. The stock rose 19% compared with the industry’s gain of 15.1% during the period.

BorgWarner currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Allison Transmission Holdings Inc. (ALSN - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Horizon Global Corporation (HZN - Free Report) . While both Allison Transmission and Fox Factory sport a Zacks Rank #1 (Strong Buy), Horizon Global Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 11%

Fox Factory has an expected long-term growth rate of 15.9%

Horizon Global Corporation has an expected long-term growth rate of 15.5%

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