Car parts makers fuel M&A, as industry readies for self-driving vehicles

Spring is upon us and summer is right around the corner, which means Americans will start getting their cars ready for road trips.

Auto part makers have always been in demand and provided steady stream of deals in the middle market.

For example, Tenneco Inc. (NYSE: TEN) agreed to buy car parts manufacturer Federal Mogul from Carl Icahn. The deal marks the latest shift in the industry that’s reorganizing as automakers prepare for an era of battery-powered and eventually driverless vehicles.

“Icahn Enterprises acquired majority control of Federal-Mogul in 2008 when we saw an out-of-favor market opportunity for a great company. During that time, we have built one of the leading global suppliers of automotive products,” says Icahn.

On the private equity side, CenterOak Partners LLC has formed a new operating company called TruRoad Holdings Inc. through the investments of JN Phillips Auto Glass and Techna Glass Inc. The PE firm formed TruRoad with capital raised from its initial $420 million fund.

TruRoad will focus on two segments: auto glass repair and insurance claim services. The company will operate under the JN Phillips Auto Glass, Techna Glass, Windshield Centers, and Harmon Auto Glass brands. TruRoad will serve consumers, insurance companies and fleet operators, and will have offices in Woburn, Massachusetts, Burlington, Massachusetts, and Sandy, Utah.

“We are excited to create TruRoad and be a part of a transformational transaction in the on-demand auto-service and claims management industry and invest alongside the management teams of these two great companies,” says CenterOak managing partner Randall Fojtasek.

View our slideshow for a roundup of auto parts deals.