Garrett Motion Reportedly Looking for Buyers
If you’ve ever shopped for an aftermarket turbocharger, you’ve undoubtedly heard of Garrett. Reports have surfaced claiming that the company is considering its future, with allegations that a sale could be in the works.
While the supplier focuses on an array of performance products, forced induction is its mainstay. However, Bloomberg is reporting that Garrett Motion may be interested in handing off the business to the highest bidder.
Formerly a part of Honeywell Transportation Systems, Garrett was spun off as an independent entity in 2018. Unfortunately, it filed for Chapter 11 bankruptcy in 2020, following some trouble adhering to loan agreements. The businesses managed to come out on the other side more-or-less intact the following year. But not without some financial assistance from Centerbridge Partners and Oaktree Capital Management.
As for the likelihood of a sale, unnamed insiders were reported as saying Garrett is just considering its options. While a buyout seems like the most probable outcome, nobody could give any firm details because they’re not supposed to be speaking on the matter. Statements like those always make you wonder why the information was leaked in the first place. But news that a sale was even a prospect seems to have helped the brand’s stock performance.
Garrett shares rose 7.5 percent on the New York Stock Exchange on Wednesday afternoon. That puts its market value right around $491 million. Though the report noted that the business is still sitting on $1.2 billion of debt – which is less than ideal for an enterprise estimated to be worth $1.5 billion in total.
For now, Garrett Motion isn’t interested in discussing the matter publicly. However, Bloomberg wrote that its insider sources were claiming it is looking for companies seeking to enhance their EV operations. Presumably, they’re referencing hybridized vehicles, which Garrett has previously hinted would be the future of the brand. But nothing was said to be concrete, suggesting there is no clear front runner for the prospective buyout.
[Image: Garrett Motion]
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A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Did they become "Garrett Motion" when they were taken over by Honeywell? I remember when they were Garrett AiResearch. They made lots of turbos for OEMs like Ford (Mustang Turbo, Thunderbird Turbo Coupe), and GM (Turbo Regal, Grand National, GNX).
Corporate moneymakers have a habit of loading debt onto one division, then spinning it off to suffer and slowly die while trying to pay it off. They are the same people who buy a business, then make that same business pay off the loan used to purchase it. The employees suffer as "efficiencies" are implemented in order to keep the ship afloat. I'm sure Business majors have a name for this piratical strategy.