TI Fluid Systems has agreed to a £1bn acquisition offer from Canadian firm, ABC Technologies.

The offer represents a cash consideration of 200 pence per share of the global designer, engineer, manufacturer and supplier of fluid storage, representing a 54.5% premium on the volume weighted average price for the 90-day period to 13 September 2024.

ABC Technologies said that the firm "represents a compelling opportunity" to acquire a "lead global manufacturer" of fluid system and thermal management solutions.

Furthermore, it added that the acquisition expands its “global and regional reach”, enhances its product portfolio, provides a “broader customer base” and improves its market position.

President and chief executive officer at ABC Technologies, Terry Campbell, said: "This transaction is a transformative strategic opportunity which unlocks value for all of our stakeholders and provides a platform for further growth. A combined business will enable us to better serve our customers, and I am excited for our teammates as we continue to build a winning future."

Chair at TI Fluid Systems, Tim Cobbold, added that the "combination will result in a larger, more diversified business with a broader range of products and customers, better positioned to navigate the current challenges facing the automotive industry and deliver sustainable long-term growth".

He stated: "The TI Fluid Systems board believes that the offer represents an attractive premium and provides shareholders with the certainty of a cash consideration that reflects TI Fluid Systems' fundamental strengths and opportunities, while also acknowledging the wider industry uncertainties."

However, analysts have noted that the acquisition of TI Fluid Systems has been on the cards for a while.

Investment director at AJ Bell, Russ Mould, concluded: "Takeovers continued to be the dominant theme for UK stocks, with TI Fluid Systems the latest company heading for the exit. ABC Technologies has finally turned its 200p per share proposal into a formal bid and TI Fluid’s board is recommending shareholders vote in favour of the deal.

"Like many other takeover targets over the past few years, TI Fluid struggled to generate much excitement among investors and traded on the type of valuation that left it vulnerable to a bid. The shares have traded below eight times 12-month forward earnings since 2022, which put TI Fluid in bargain basement territory. It was only a matter of time before someone gobbled it up."

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