M/A-Com sells auto unit to Autoliv for $100M

LOWELL — In a deal between two of the city’s most prominent private companies, M/A-Com Technology Solutions Holdings Inc. has agreed to sell its automotive business to Autoliv ASP Inc. for $100 million in cash, plus the opportunity to receive up to an additional $30 million on achievement of revenue-based earn-out targets through 2019.

M/A-Com Chief Financial Officer Bob McMullan called the deal a “win-win” for both sides, as employees affected by it will in many cases be returning to a familiar environment. Swedish-based Autoliv’s Lowell facility was once part of M/A-Com when it was headquartered on Pawtucket Boulevard and operated as a unit of Tyco Electronics.

M/A-Com is now based at 100 Chelmsford St. It also runs a testing facility at 121 Hale St.

“Some people will be reunited,” McMullan said. He declined to specify how many employees were affected, but put the number at “less than 70.”

McMullan explained the business unit being sold is one which designed and built GPS modules for Ford Motor Co. He said that by selling it, M/A-Com becomes “a 100 percent semiconductor company.”

In a statement, CEO John Croteau added that M/A-Com’s operating margin has “expanded to the point that the automotive business was no longer accretive to our operating model.”

“The divesture of our automotive business will enable M/A-Com to realize its full potential as a pure-play high-performance analog company and demonstrates our confidence in achieving high growth rates in our retained core businesses,” Croteau said.

M/A-Com is a leading supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products. It employs more than 900 people, and posted sales of $418.7 million for its most recent fiscal year, which ended Oct. 3. In its most recent quarter, it said the auto unit represented about 18 percent of its business, which would put those revenues at about $75 million annually.

Autoliv is a provider of automotive-safety systems. A year ago, it announced it was cutting 93 of its approximately 200 jobs in Lowell and transferring production of radar sensors (devices used in cars’ collision-warning systems and in blind-spot detection systems) to another site in Canada.

Jan Carlson, Autoliv’s chief executive, said in a statement that the M/A-Com deal will “expand our capabilities in active safety through the addition of GPS module-related products.”

An email to an Autoliv spokesman wasn’t immediately returned.

M/A-Com’s board of directors has approved the transaction, which remains subject to antitrust approvals and other customary closing conditions. It is expected to close this fall.

Jefferies LLC acted as financial adviser and Perkins Coie LLP acted as legal counsel to M/A-Com.

Follow Dan O’Brien on Twitter @dobrien_thesun.