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Aptiv to Shell Out $650M for Winchester Interconnect Buyout

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Aptiv PLC (APTV - Free Report) yesterday announced that it has inked a deal to purchase Winchester Interconnect — a U.S.-based provider of custom engineered interconnect solutions for harsh environment applications — for $650 million from an affiliate of Snow Phipps Group.

Subject to regulatory approval and fulfillment of customary closing conditions, the proposed buyout is expected to close by the end of 2018. It comes on the heels of Aptiv's acquisition of South Korea-based provider of engineered connectors and cable management solutions, KUM, on Jun 14.

A glimpse of Aptiv’s price trend reveals that the stock has had an impressive run on the bourse in the past three months. Shares of Aptiv have returned 12.8%, significantly outperforming the industry’s gain of 7.6% in the said time frame.


Signal and Power Solutions Likely to Grow

Post deal closure, Winchester will operate as an independent business unit under Aptiv's Signal & Power Solutions segment. This segment designs, manufactures and assembles electrical architecture in vehicles, including engineered component products, wiring assemblies and harnesses, connectors, cable management, electrical centers, and hybrid high voltage and safety distribution systems.

In first-quarter 2018, this segment contributed the largest chunk (around 72%) to Aptiv’s total revenues. Revenues in this segment increased 11.7% year over year to $2.62 billion

Kevin Clark, Aptiv’s president and chief executive officer, stated, "Winchester further establishes Aptiv as a market leader in connectivity solutions and is a strategic fit to our Signal & Power Solutions segment."

Acquisitions have been one of the key growth catalysts for Aptiv. The company has been continuously acquiring and investing in companies globally and internationally to expand its capabilities, strengthen market share and increase its geographic presence.

Zacks Rank & Stocks to Consider

Currently, Aptiv has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Business Services sector include Blucora (BCOR - Free Report) , IQVIA Holdings (IQV - Free Report) and Paychex (PAYX - Free Report) . While Blucora sports a Zacks Rank #1, IQVIA Holdings and Paychex carry a Zacks Rank #2.

The long-term expected earnings per share growth rate for Blucora, IQVIA Holdings and Paychex is 20%, 11.8% and 8.2%, respectively.

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