Toronto, Ontario – Martinrea International Inc., a diversified and global automotive supplier engaged in the design, development and manufacturing of highly engineered, value-added Lightweight Structures and Propulsion Systems, today announced it has completed the acquisition of the Structural Components for Passenger Cars operations of Metalsa S.A. de C.V. The purchase price for the transaction, subject to certain adjustments post-closing, was USD $19.5 million in cash, inclusive of working capital and on a debt free basis. The transaction has received regulatory approval from all applicable merger authorities.
The operations acquired by Martinrea specialize in a wide variety of metal forming technologies, including chassis components such as cradles, control arms, and trailing arms; body components such as side rails, A and B pillars, door beams, wheel housings and bumpers; and several other components such as fuel tanks. The operations have some great processes and leading edge technologies in joining multi-materials further promoting Martinrea’s lightweighting strategy, including hot stamping and paint, as well as composite capabilities. The largest customers of the business are Daimler, BMW, Volkswagen and Audi.
The acquisition adds six plants to the Martinrea footprint, including facilities in Germany, the United States, Mexico, South Africa and two in China, and approximately 2,000 creative and motivated team members to the Martinrea family. The acquired assets are expected to generate sales in 2020 of approximately CDN $400 million and will be integrated into operations immediately as Martinrea seeks to achieve synergies and efficiencies. The acquired assets include:
- a large facility in Bergneustadt, Germany, with a technical centre which is the base for European production and engineering for the group, producing body, safety and suspension structures; this facility is approximately 70 kilometres from Martinrea’s aluminum operations in Meschede, Germany, creating some opportunity for synergies;
- a plant in San Luis Potosi, Mexico, producing body, chassis and suspension structures, as well as door beams and steel fuel tanks. This facility is approximately 5 kilometers from another Martinrea steel metal forming operation, creating additional opportunities for synergies;
- a relatively new start-up facility in Tuscaloosa, Alabama, which produces safety structures, front ends and some service parts and contract services;
- two facilities in China, one near Beijing and one in Shenyang, that presently produce body, safety and suspension structures for Daimler and BMW, respectively; and,
- a facility in South Africa that produces body structures for Daimler.
Martinrea’s present steel metal forming business is located in North America, and this acquisition gives the Company a broader footprint in Europe, China and South Africa, as well as a presence in the Lightweight Structures area with European-based customers such as Daimler and BMW.
Pat D’Eramo, President and CEO of Martinrea stated: “We are very pleased to announce the closing of the acquisition. We have been working with many of our new people to ensure a smooth transition. We welcome all our new team members and we believe we will achieve much, as we strengthen the operations and grow our business.”
“I am also pleased to announce that, through our advanced lightweighting and manufacturing technologies expertise, we have secured a significant amount of new body-in-white business from Daimler in connection with its EVA II electric vehicle platform. The new business is expected to generate approximately $100 million in annualized sales at mature volumes. We are very excited to collaborate with Daimler to implement our advanced joining technologies on the vehicle, utilizing a number of materials. This work will help to fill current plant capacity when this program launches in 2022.”
About Martinrea International Inc.
Martinrea International Inc. (TSX: MRE) is a leader in the development and production of quality metal parts, assemblies and modules, fluid management systems, and complex aluminum products focused primarily on the automotive sector. Martinrea currently employs approximately 17,000 talented and motivated people in 57 operating divisions in Canada, the United States, Mexico, Brazil, Germany, Slovakia, Spain, China and Japan. Martinrea’s vision is making lives better by being the best supplier we can be in the products we make and the services we provide. For more information on Martinrea, please visit www.martinrea.com. Follow Martinrea on Twitter and Facebook.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of applicable Canadian securities laws including statements related to the Company’s expectations of the benefit of the intended acquisition and any synergies, sales in 2020 and from the Daimler business, positive customer relationships, program wins, plant capacity and launch dates, the pursuit of its strategies, and the continued investments in the business, as well as other forward-looking statements. The words “continue”, “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “views”, “intend”, “believe”, “plan”, “outlook” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances, such as expected sales and industry production estimates, current foreign exchange rates (FX), timing of product launches and operational improvements during the period and current Board approved budgets. Many factors could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, including the industry trends and risk factors outlined in the Company’s Annual Information Form and other public filings which can be found at www.sedar.com.
These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol “MRE.”
For further information, please contact:
Fred Di Tosto, Chief Financial Officer
Deanna Lorincz, Global Director, Communications and Marketing