Motherson Sumi Systems acquires Stoneridge’s wiring harness business
27 May 2014
Auto component manufacturer Motherson Sumi Systems Ltd (MSSL) has acquired wiring harness business of US-based Stoneridge Inc for $65.7 million by way of asset purchase.
Following the announcement, MSSL shares soared 5 per cent on the Bombay Stock Exchange.
The acquisition is expected to be completed by third quarter of 2014. The acquired business has a turnover of about $300 million, the company said in a statement.
MSSL is the flagship company of the Samvardhana Motherson Group. Set up in 1986, it is a joint venture between Samvardhana Motherson Group and Sumitomo Wiring Systems (Japan).
"With this acquisition, MSSL gets one of the most experienced wiring harness manufacturing operations in the region which would increase our customer reach, and most importantly add very talented team members who can help MSSL to service the customers in these geographies. We envisage North America playing a key contributor to our Vision 2020,'' said Vivek Chaand Sehgal, chairman of Samvardhana Motherson Group.
''Being done through a wholly-owned subsidiary, this acquisition with base revenues of about $300 million would provide us a strong launchpad for our 2020 targets. It's a step further in MSSL's philosophy of growing all its product segments and maintaining a well-balanced product portfolio,'' said Sehgal added.
The acquisition includes six manufacturing facilities located in Portland, Indiana; Chihuahua, Mexico; Saltillo Mexico; and Monclova, Mexico; and engineering and administrative centre in Warren, Ohio.
The acquired business has a history of 48 years of wiring harness manufacturing and is a well-established name in the markets it serves.
Before the acquisition of Stoneridge's wiring harness, MSSL has done 10 acquisitions. Citigroup Global Markets was the financial advisor to MSSL.
This acquisition expands MSSL's wiring harness global business in North America, mainly serving commercial vehicles, agricultural and material handling equipment.
The acquired business would now have access to expertise of MSSL in the areas of wire harnesses, wires, wiring harness components including connectors, terminals, protectors, fuse and relay boxes.
So far MSSL has mde 10 acquisitions, the first being in wiring harness in 2002. In 2009 it acquired Visiocorp mirror business(now renamed as Samvardhana Motherson Reflectec) and in 2011 Peguform (now named Samvardhana Motherson Peguform), which established MSSL as a global supplier to major automotive industry OEMs.
MSSL is currently the largest auto ancillary in India and is ranked 55th among global auto component suppliers.
It is also included in Forbes Fabulous 50 Asian Companies and the Top 100 global challengers by Boston Consulting.
