Aptiv Acquires Wind River for $4.3B, Expand Auto Software Offering

Global technology company Aptiv PLC (NYSE: APTV) is set to acquire software company Wind River from TPG Capital in a $4.3 billion cash deal announced on January 11, which will be financed through a combination of cash and debt.

According to the filings, Aptiv is a “global technology company focused on making mobility safer, greener and more connected” and Wind River is a “global leader in delivering software for the intelligent edge.” Specifically, Wind River’s technology is used on more than two billion edge devices for more than 1,700 customers allowing for the “secure development, deployment, operations and servicing of mission-critical intelligent systems.” Accordingly, Wind River’s technology is used in the aerospace, defense, telecommunications, industrial and automotive industries utilizing Wind River Studio – a “highly versatile, comprehensive cloud-native intelligent systems software platform that enables full product lifecycle management for edge-to-cloud use cases.” The filings noted that Wind River had approximately $400 million in revenue in 2021.

“The automotive industry is undergoing its largest transformation in over a century, as connected, software-defined vehicles increasingly become critical elements of the broader intelligent ecosystem,” Kevin Clark, president and CEO of Aptiv, said in a press release. “Fully capitalizing on this opportunity requires comprehensive solutions that enable software to be developed faster, deployed seamlessly and optimized throughout the vehicle lifecycle by leveraging data-driven insights. … With Aptiv and Wind Rivers synergistic technologies and decades of experience delivering safety-critical systems, we will accelerate this journey to a software-defined future of the automotive industry.”

“Wind River has established itself as a worldwide leader in cloud-native, intelligent edge software that delivers the highest levels of security, safety, reliability and performance,” Kevin Dallas, president and CEO of Wind River, said in a press release. “Combining Wind River’s industry-leading software, customer base and talent with Aptivs complementary technologies, global resources and scale will realize our vision of the new machine economy. Together we will accelerate the digital transformation of our customers across industries through best-in-class intelligent systems software.” 

The press release noted that the transaction will allow Aptiv to compete in the large software-defined mobility opportunity and expand into several high-value industries with Wind River’s team and software platform. Reportedly, the deal will facilitate end-use innovations and applications, especially as compute and processing moves toward the edge and other connected devices, including vehicles. Pursuant to the deal, Aptiv will combine its complementary SVA platform with Wind River Studio as well as its automotive expertise to further expand into the automotive software sector.

Wind River will continue to be led by president and CEO Kevin Dallas; it will continue to operate as a standalone business within Aptiv as part of Aptiv’s Advanced Safety & User Experience section.

The deal is expected to close in the middle of 2022, subject to regulatory approval and customary closing conditions.

Aptiv is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as well as Covington & Burling LLP and its financial advisor is Goldman Sachs & Co. LLC. Wind River is represented by Ropes & Gray LLP and its financial advisor is Morgan Stanley & Co. LLC.

Prior to the announcement, on January 10, Aptiv’s stock was valued at $165.07. On the day of the announcement, January 11, the stock was valued at $159.70. Days later on January 14, it was valued at $152.60 and as of the time of reporting on January 18, the stock was valued at $150.60.

Previous Aptiv acquisitions include its acquisition of German telecommunications company gabocom in 2019 for $310 million and its acquisition of engineered interconnect solutions company Winchester Interconnect for $650 million in 2018. The newest deal seems to be a move to strengthen Aptiv’s automobile segment.