Randoncorp (RAPT4) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition provides immediate access to the North American trailer axle and suspension market, supporting internationalization, revenue diversification, and exposure to strong currencies.

• Leverages AXN's strong brand and established presence to expand the product portfolio and geographic reach.

• Complements existing operations in Brazil, Mexico, and the UK, reinforcing OEM and aftermarket verticals.

Financial terms and conditions

• Asset acquisition price is $12.3 million (BRL 74 million), with inventory up to $37 million (BRL 223 million) to be acquired over 18 months.

• AXN Heavy Duty generated $65 million in revenue and 5% adjusted EBITDA in 2024.

• Funding is secured through U.S. credit lines, with debt and revenue both in dollars to create a natural hedge.

• Asset purchase payment due by January 31, 2025, with inventory paid as consumed.

• Acquisition multiple is 4.0x EV/EBITDA, projected to decrease to 0.8x by 2029.

Synergies and expected cost savings

• Estimated $60 million in EBITDA synergies over five years, primarily from aftermarket expansion, supply chain consolidation, and leveraging advanced technologies.

• Cost optimizations expected through logistics, working capital, and back office integration.

• Margin improvements anticipated by offering integrated solutions and capitalizing on market recovery.