IDQ up for sale again

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
--------------------------------------------------------------------------------------------------------

IDQ, a Garland, Texas-based provider of aftermarket automotive air conditioning products, is on the block again a year after it was acquired by Castle Harlan Partners, two sources close to the company told mergermarket.

The company, which was acquired by Castle Harlan last June for around USD 170m, has retained Harris Williams as a financial advisor, as it did for the Castle Harlan transaction, the sources said.

IDQ and Harris Williams did not return calls placed seeking comment. An official at Castle Harlan also did not call back.

IDQ has doubled its EBITDA since coming under Castle Harlan’s ownership, according to the first source; its EBITDA is currently in the USD 50-60m range, the first source added. The sale process has just started, he said, and Castle Harlan would expect a 6x EBITDA multiple, roughly the same that IDQ’s previous owner, Arsenal Capital Partners, received. An industry banker suggested the company could sell for a bit higher, between 6.5-7x EBITDA.

Financial buyers are the likeliest bidders, the first source said, as strategics “didn’t show up last time.” However, the industry banker said aftermarket auto refrigerant players such as Rank Group, which just bought Honeywell’s Consumer Products Group, or ITW, which recently acquired Slime Products, could make a play for the company.

IDQ was formed in 2007 after Arsenal combined Interdynamics, which it purchased in 2002 through a roughly USD 20m equity investment, with EF Products.

--------------------------------------------------------------------------------------------------------

For more information or to inquire about a trial please email sales@mergermarket.com or call EMEA: + 44 (0)20 7059 6105 Americas: +1 212 686-5277 Asia-Pacific: +852 2158 9730