Aptiv to Snap up Wind River From TPG for $4.3B

Aptiv PLC (NYSE: APTV) has inked a deal with TPG Capital, the private equity platform of global alternative asset management firm TPG, to acquire Wind River in an all-cash deal worth $4.3 billion.

Aptiv is a global technology company that develops safer, greener and more connected solutions that enable the future of mobility. With a current market capitalization of $45  billion, its shares have risen 14% over the past year.

Benefits of the Deal

Wind River is a leading provider of intelligent edge software that enables the secure development, deployment, operations and servicing of mission-critical intelligent systems across industries like aerospace and defense, telecommunications, industrial and automotive markets. In 2021, it generated approximately $400 million in revenues.

The addition of Wind River’s expertise and leading software platform will allow Aptiv to create a unique position in mission-critical software across multiple industries that are digitally transforming at a rapid pace. The combination will lead to the accelerated digital transformation of customers across industries through best-in-class intelligent systems software.

Aptiv will combine Wind River Studio offering with its complementary SVA™ platform and automotive expertise to strengthen its position in automotive software solutions, and continue the intelligent transformation of Aptiv into the edge-enabled, software-defined future company.

Other Details

Upon completion, Wind River will operate as a stand-alone business and will be a part of the Advanced Safety & User Experience (AS&UX) segment.

Aptiv will fund the transaction by utilizing cash as well as debt. The acquisition is expected to close by the middle of 2022, subject to certain regulatory approvals.

CEO Comments

Aptiv CEO, Kevin Clark, commented, “The automotive industry is undergoing its largest transformation in over a century, as connected, software-defined vehicles increasingly become critical elements of the broader intelligent ecosystem. With Aptiv and Wind River’s synergistic technologies and decades of experience delivering safety-critical systems, we will accelerate this journey to a software-defined future of the automotive industry.”

Analysts Recommendation

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 3 Buys, 3 Holds and 1 Sell. The average Aptiv stock price projection of $193.20 implies 19.96% upside potential to current levels.

Aptiv will report its upcoming earnings for the fourth quarter and full year on February 3, 2022.

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 85% Bullish on APTV stock, compared to a sector average of 70%.

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