This is just a little background on the Sensata story that I thought I would share, from a comment I posted in jamess' Ed Show diary. This is what I can piece together about how the company came about. Please correct me if I got anything wrong here. Business deals are not my wheelhouse.
Bain bought the sensors business from Texas Instruments for $3 billion in 2006, created a new company and named it Sensata. Then in 2010 they purchased the sensors division of Honeywell and added it to the portfolio.
They then offered an IPO for 18% of the new company in 2010.
The business headquarters is in Attleborough Mass but it is registered as a Dutch company. What is the tax advantage there, anyone?
From a trade magazine:
Birthed from Texas Instruments
October 6, 2006 By: Barbara G. Goode, Sensors
The World Depends on Sensors and Controls. That's the tagline of the firm that calls itself "the newest 90-year old company in America." That company, Sensata, was born this year from the legacy of Texas Instruments—and it plans to have a big impact on industrial sensing and control.
Starting Early
One of January's biggest news stories announced that Texas Instruments Inc. (TI) had agreed to sell its Sensors & Controls business to Bain Capital, a private equity investment firm, for $3.0 billion in cash. That portion of TI supplied engineered sensors and controls to the appliance, climate control, industrial, automotive, lighting, and aircraft markets. Its annual revenue topped $1 billion, and the business employed about 5,400 people worldwide.
Before the announcement, TI had begun building a new headquarters for its Sensors & Controls business in Attleboro, Massachusetts. The grand new facility now houses Sensata, the company that TI's Sensors & Controls business has become. Last week I had the opportunity to visit Sensata and learn about the direction of this quiet but powerful force in the sensor industry.
No job cuts or other changes are planned. From
the local paper:
Texas Instruments to Sell Attleboro Unit for $3 Billion
January 10, 2006
By Neil Downing, The Providence Journal, R.I.
Jan. 10–ATTLEBORO, Mass. — For 47 years, the name Texas Instruments has been synonymous with Attleboro.
The company has run one of the city’s — and the region’s — biggest and best-known manufacturing operations, employing generations of workers from Southeastern Massachusetts and Rhode Island.
That is about to change. Texas Instruments — or TI, as the company is sometimes called — said yesterday that it plans to sell its Attleboro-based Sensors & Controls unit to Bain Capital LLC of Boston in a transaction worth $3 billion.
No job cuts or other changes are planned, spokespeople for TI and Bain said.
If the deal is completed as planned, possibly in June, TI will cede ownership of Sensors & Controls, which has $1.1 billion in annual sales and about 5,400 employees worldwide, including 1,100 in Attleboro.
As a result, Texas Instruments (TXN:NYSE) will end its longstanding association with Attleboro, an association it has had since 1959, when it first acquired the business — then known as Metals & Controls Corp.
From the
Bain press release:
Bain Capital completes purchase of Sensata Technologies from Texas Instruments
Sale creates standalone global leader in sensors and controls
ATTLEBORO, Massachusetts (April 27, 2006) – Sensata Technologies, Inc., formerly the Sensors & Controls business of Texas Instruments Incorporated, today announced that Bain Capital, LLC, a leading global private investment firm, has completed its purchase of the company. The total value of the transaction, which was announced on January 9, 2006, is $3.0 billion.
The sale creates a standalone company that is the global leader in the sensors and controls business. Headquartered in Attleboro, Massachusetts and with additional manufacturing and technology development centers located in Brazil, China, Holland, Japan, Korea, Malaysia, and Mexico, the company also has sales offices around the world. Sensata Technologies employs 5,400 people, including 3,750 in the Americas, 1,350 in Asia, and 300 in Europe.
"The completion of the sale is a significant milestone in our company’s history. We enter this new phase of our growth and development with a new name – Sensata Technologies – and a renewed commitment to excellence, innovation and customer service," said Thomas Wroe, Jr., President and Chief Executive Officer of Sensata Technologies. "Our day–to–day operations will remain the same, including our management team, staff and locations, and so will our dedication to providing customers with solutions that enable them to win in their marketplaces. We will invest in our growth as a standalone company for the benefit of our customers and employees."
Of couse they were forced to freeze pensions. From the
local Attleboro station:
Former TI in Attleboro freezes pensions
Romney's Bain bought what's now Sensata
Updated: Monday, 19 Dec 2011, 1:30 PM EST
By Ted Nesi, WPRI.com Reporter
ATTLEBORO, Mass. (WPRI) - Sensata Technologies, the former sensors-and-controls division of Texas Instruments spun off in 2006 by Mitt Romney's old company, will freeze its pension plan and scale back 401k contributions next month, WPRI.com has learned.
Sensata employees will no longer get pension credit for additional years of work or future raises after Jan. 31, with exceptions for initial vesting and early retirement eligibility, Sensata CEO Tom Wroe told employees last week in an email obtained by WPRI.com.
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Texas Instruments employed about 5,000 workers in Attleboro and Mansfield at its height before moving most of its manufacturing operations to Asia. Sensata now employs about 945 workers in the U.S., down from 1,585 in 2008, according to regulatory filings.
Then they bought a piece of Honeywell. From the
Freeport IL paper:
Honeywell sells automotive sensor unit to Sensata Technologies
By Eric Petermann
The Journal-Standard
Last update Oct 29, 2010 @ 11:14 AM
Freeport, Ill. —
Honeywell’s Sensing and Control (S&C) business unit, which employs nearly 900 people in Northwest Illinois, announced Thursday it will sell its “Automotive On-Board” sensor products business for $140 million to Sensata Technologies Holding, N.V.
The transaction will impact about 165 employees in S&C’s Plant No. 4 in Freeport, one of four S&C sites around the world where the products are manufactured. Freeport employees learned of the sale Thursday morning.
The divestiture affects about 335 S&C employees globally who support the automotive sensor products. The vast majority of those will be retained by Sensata, including all of the affected employees in Freeport, who will be offered jobs with Sensata when the deal is closed, according to Mark Hamel, spokesman at the Minneapolis office for Honeywell.
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Sensata Technologies Holding, N.V., is one of the world’s leading suppliers of sensing, electrical protection, control and power management solutions. Majority-owned by affiliates of Bain Capital Partners, LLC, a leading global private investment firm, and its co-investors, Sensata employs approximately 10,000 people in nine countries.
Here is the press release on the Honeywell deal. I wonder if Romney was on that conference call?
There was an IPO in 2010.
Sensata IPO nets $569M as bids stay low
By Ted Nesi
PBN Web Editor
Posted 3/11/10
ATTLEBORO – Sensata Technologies Inc., the former Texas Instruments sensors-and-controls division sold off four years ago, sold $569 million worth of shares in its initial public offering on Wednesday.
Sensata sold 31.6 million shares for $18 each, which was at the low end of its asking range of $18 to $20, according to a Securities & Exchange Commission filing. Sensata’s underwriters did not exercise an option to buy an additional 4.74 million shares.
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Founded in 1916, Sensata was part of Texas Instruments from 1959 until April 2006, when it was taken private and renamed in a leveraged buyout led by private-equity firm Bain Capital LLC. (Sensata is Latin for “those gifted with sense.”)
Although Sensata leases a 433,000-square-foot facility in Attleboro as its main headquarters, the company is registered as a Dutch business and its official corporate headquarters is in Almelo, The Netherlands.
This has been an interesting lesson for me in corporate raiding. I guess what you do is take long-standing American companies, borrow money to buy them off in pieces or in whole, splice them together into a new company nominally headquartered in a foreign tax haven, and then bit by bit you ship the manufacturing to a low-wage nation and then announce your IPO, so you can "harvest" the profits off your hard work and pay yourself some handsome fees to boot. Please correct me if I'm wrong here. I am not a regular reader of the Wall Street Journal.
UPDATE: I was not aware that the Netherlands is a famous tax haven. So Bain not only stole the jobs from Americans, they stole the taxes from America.
Tax haven: Dutch hypocrisy in times of crisis
In global rankings for flow of capital, the Netherlands is always up there in the top ten with countries such as Switzerland, the Cayman Islands, Ireland and Luxembourg. These are all relatively small economies with massively disproportionate financial sectors. They are links in a chain of financial centres which enable multinational concerns, banks and hedge funds to pump inconceivably huge flows of capital around the world. These financial flows bear no relation whatsoever to any actual economic activity in the country where they appear on the books.
These financial flows largely take place within empty shells, better known as brass plate companies. The main aim is to avoid paying tax and to sidestep regulations. As a result, investments from country A do not go directly to country B, but are channelled through the Netherlands in order to take advantage of the fiscal tricks that the Netherlands has to offer.