Lear to buy Antolin's seating unit for 286 million euros
DETROIT -- Lear Corp. said it agreed to buy Grupo Antolin's automotive seating unit in a bid to expand sales abroad.
For Antolin, the sale of a unit that accounted for less then 10 percent of its global sales will let the Spain-based interiors specialist improve its production capabilities, open new factories and increase r&d capabilities, the company said in a statement.
Lear, an automotive seating and electrical distribution system supplier based near Detroit, said in a statement that the transaction is valued at 286 million euros ($307 million) on a cash and debt-free basis.
The suppliers expect to close on the acquisition in the first half of the year, subject to the usual regulatory approvals in Europe.
The deal adds strength for Lear among European automakers. The acquired unit's $322 million in annual sales to customers that include PSA Group, Daimler, Renault-Nissan and Volkswagen Group.
The seating business has consolidated heavily over the past five years, with the largest players -- Magna International, Adient and Lear -- vying for market share. Seating is seen as an area ripe for growth, with the expected rise of autonomous vehicles potentially redefining automotive interiors.
The strong dollar and weak euro also likely made the acquisition appealing for Lear.
Grupo Antolin's seating business specializes in seat assembly, structures and mechanisms, and trim. It employs 2,273 people in six countries.
"The acquisition ... is another important step in strengthening our core seating business by further diversifying our global seating sales, expanding our seat component capabilities and accelerating profitable sales growth," Lear CEO Matt Simoncini said in the statement.
Analyst Brian Johnson of Barclays, in a report issued after the deal was announced, said the deal could help build Lear's profit margins in its seating business.
"As we understand, Antolin’s seating margins are higher than LEA’s current margins," the report said.
"And given Antolin has noted in the past that it is limited in its ability to compete in seating with the likes of LEA, ADNT, and others, this deal is likely an example of an asset that is better held by a more natural owner. Accordingly, LEA may be able to drive some scale efficiencies in the assets, which Antolin wasn’t able to do given its smaller share."