European Buyout Enhances Johnson - Analyst Blog
June 22 2011 - 10:15AM
Zacks
Johnson Controls Inc. (JCI) announced that it
has completed the acquisition of two European business entities,
Keiper recliner systems and Recaro seating business in Germany,
after getting approval from the European Commission in Brussels,
Belgium on June 17, 2011.
Keiper is a market leader in recliner system technology. It is
renowned for its engineering and manufacturing expertise in metals
and mechanisms for automobile seating systems. It will be closed in
the third quarter of fiscal 2011. On the other hand, Recaro
Automotive offers complete seating facilities for the original
equipment manufacturers (OEMs) and aftermarket.
As part of the transaction, Johnson Controls will also acquire
the licensing rights for the exclusive global use of the Recaro
trademark for the automotive industry, excluding Recaro Aircraft
Seating, Recaro Child Safety and Recaro Home, which will remain
part of Putsch Holding in Kaiserslautern, Germany. The acquisition
includes 4,750 employees at 13 locations across seven
countries.
Johnson Controls has not disclosed terms of the transaction.
However, it has revealed in a regulatory filing that it has agreed
to buy Keiper and Recaro’s businesses as well as C. Rob.
Hammerstein Group for a total of $950 million.
In December 2010, Johnson Controls signed an agreement to
acquire C. Rob. Hammerstein Group (“CRH”), a Solingen,
Germany-based manufacturer and global supplier of metal seat
structures and mechanisms. CRH has operations in nine countries and
has 3,600 employees across the world.
The CRH acquisition will help Johnson Controls to serve a
completely different set of customers compared to ones it has been
serving so far. It will facilitate growth particularly in China,
Mexico, Turkey, Hungary and Romania.
The company will integrate CRH business into its metal and
mechanisms unit, which is a part of its seating components group
within the Automotive Experience business. Therefore, the
acquisitions of Keiper, Recaro and C. Rob Hammerstein will help
Johnson Controls become a global leader in seating components.
Johnson Controls Inc. is a supplier of automotive interiors,
batteries, and other control equipment. In the most recent
reportable quarter, the company has furnished 18 major launches for
Ford Motor Co. (F), Kia, Volkswagen, Tata
Motors (TTM), Daimler AG (DDAIF) and
Honda Motor Co. (HMC).
In the second quarter of its fiscal 2011, the Zacks #3 Rank
(Hold) company reported a 31% increase in profit to $383 million
(excluding non-recurring items) from $292 million (excluding
non-recurring items) in the same quarter of previous year. On
earnings per share, profits improved 30% to 56 cents from 43 cents
in the prior year, beating the Zacks Consensus Estimate by a
penny.
The improvement in earnings during the quarter was attributable
to higher sales on the back of the company’s strong position in the
key geographic markets. Net sales in the quarter grew 22% to $10.14
billion, which was higher than the Zacks Consensus Estimate of
$9.25 billion.
DAIMLER AG (DDAIF): Free Stock Analysis Report
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