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HellermanTyton’s (LSE:HTY) share price busted out of the doldrums of 52 weeks of trading between 273.00 (14 October 2014) and 375.00 (28 May 2015), opening at 470.00 this morning. The boost came from an announcement that Delphi Automotive PLC (NYSE: DLPH) has agreed to acquire HTY for $1.7 billion (£1.67 billion). The offer was accepted at 480.00 pence per share, a 44.5% premium on HTY’s close on 29 July.
HTY shares are trading this afternoon at 472.00. Delphi opened the day at 76.58, down 2.3%. It is experiencing a mild recovery with shares now trading at 77.78, down 0.7% from yesterday’s close.
Two Reasons Why I Did Not Want to Write This Story
Even though I felt compelled to do so because of the windfall for HellermanTyton’s investors, I had to struggle to overcome two personal obstacles.
- The original U.S.-based Delphi Automotive was the very first stock I ever purchased. It remains the ONLY stock on which I have lost money. To make matters worse, I lost my entire investment after the company filed for Chapter 11 bankruptcy protection. I bought Delphi based on the advice to begin purchasing stocks in companies in sectors with which you have familiarity. I thought that 24 years in the automotive aftermarket gave me enough familiarity. I was wrong. HERE’S SOME ADVICE: Buy stock in companies that have a solid business plan that addresses an overwhelming need. To really be conservative, choose those with an established track record. I do not like green eggs and ham, and I do not like Delphi.
- I did not want to type HellermanTyton repeatedly. It is not a keyboard-friendly name.
Delphi and HellermanTyton
Delphi is (now) a leading global supplier of technologies for the automotive and commercial vehicle markets. It operates major technical centers, manufacturing sites and customer support services in 32 countries. Delphi delivers innovation for the real world with technologies that make cars and trucks smarter and safer as well as more powerful and efficient. Delphi is based in Gillingham, UK.
HellermannTyton is one of the leading suppliers of products for fastening, fixing, identifying and protecting cables and their connecting components. They also develop pioneering systems in the field of data and network technology. HTY was incorporated in 2013 and is based in Crawley, UK, although it is headquartered in Troy, Michigan.
Delphi said, “The purchase will enable it to capitalize on growing demand for cars that connect to mobile phones and other devices.” CEO Kevin Clark commented that, “HellermannTyton positions Delphi to provide customers with an even broader portfolio of highly engineered and customized connection systems and cable management solutions.”
Delphi Earnings Report for Q2
In the meantime, Delphi also released it quarterly earnings report for the period ending 30 June 2015. The company reported a 4% decline in revenue year-on-year at $3.9 billion, with an adjusted operating income of $526 million. Year-to-date adjusted revenue is up 5% to $7.7 billion.
Clark said, ““Delphi’s strong financial results and record second quarter margins are the result of another quarter of outstanding operating performance and the continued execution of our strategy to generate growth.” Where was he when I invested?
Image courtesy of adamr at FreeDigitalPhotos.net
