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Bain in $3bn Texas Instruments deal

Boston-based Bain Capital has inked a deal to carve out the Sensors & Controls business of Texas Instruments for $3bn.

Bain Capital has agreed to acquire the Attleboro, Massachusetts-based Sensors & Controls business of Texas Instruments. The deal is valued at $3 billion (€2.45 billion).

The acquired unit designs and manufactures engineered sensors and controls to a number of different market segments, including the appliance, industrial, automotive, lighting and aircraft industries. The company, headed by Thomas Wroe Jr., has a presence in the Americas, Europe and Asia and employs roughly 5,400 people.

The unit generated around $1.13 billion in revenues in 2004, and according to recent guidance provided by Texas Instruments, should book at least $1.17 billion in revenues for 2005.

The sale did not include the operations of the radio frequency identification systems group, which currently resides in the Sensors & Controls unit.

The $3 billion purchase price comes in above analyst expectations, which following a Wall Street Journal report in December, had pegged a sale price at around $2.5 billion.

Morgan Stanley advised Texas Instruments on the deal, while Lazard provided a fairness opinion. Bain, meanwhile, received financial advice from JPMorgan Chase, and will finance the deal with debt coming from Morgan Stanley, Bank of America and Goldman Sachs.

Bain is currently investing out of Bain Capital Fund VIII, a $3.5 billion vehicle raised in 2004. This latest deal would seem to signal that Bain intends to keep up what has been a torrid investment pace for the Boston firm. In the fourth quarter of last year alone, the firm cinched deals to acquire coffee and donut chain Dunkin’ Donuts, the FCI connectors unit of Areva, broadcaster Susquehanna Radio and CRC Health Group, a chain a drug and alcohol treatment centres.

Bain’s carveout of the Sensors & Controls business is expected to close in the first half of this year.