SAF-Holland expands its presence in Indian transport market
The company has acquired trailer axle and suspension system manufacturer York Transport Equipment
SAF-Holland GmbH has signed an agreement with TRF Singapore Pte. Ltd. and TRF Holdings Pte. Ltd. for the acquisition of the axle and suspension system manufacturer York Transport Equipment (Asia) Pte. Ltd.
The York Group has a strong market position in the APAC region, particularly in the heavy duty segment (> 9 tons) for trailer axles and mechanical suspension systems. York is also one of the main suppliers in India for semi-trailers’ spare parts and accessories.
The purchase price for the stake in York, including all liabilities, amounts to around $40.6 million (EUR33 million). SAF-Holland is financing the acquisition fully from its existing cash on hand. In the first twelve months after completion of the acquisition, SAF-Holland anticipates a contribution to SAF-Holland Group sales of around $61.5 million (EUR50 million) with an adjusted EBIT margin in the mid-single-digit percentage range. Over the next few years, as the York Group becomes integrated into the Group, the EBIT margin is expected to move successively higher in the direction of the overall EBIT margin for the Group. Completion of the transaction is subject to the approval of shareholders of TRF Limited, the parent company of TRF Singapore Pte. Ltd. and TRF Holdings Pte. Ltd. Closing of the transaction and the subsequent inclusion in SAF-Holland Group’s scope of consolidation is expected for the second quarter of 2018.
Alexander Geis, president of the EMEA/India region, SAF-Holland, said: "Following the takeover of the Brazilian company KLL in 2016 and most recently of V.Orlandi in Italy, the acquisition of the York Group is yet another step towards our targets under our 2020 growth strategy. The acquisition of York will contribute significantly towards strengthening our position in the Mid-East and Africa as well.”
Dr Matthias Heiden, CFO, SAF-Holland, said: "The York Group will make a positive contribution to the Group’s earnings already in the first year following the acquisition. We will immediately integrate the company into SAF-Holland Group’s structures. We are confident that we will be able to develop the adjusted EBIT margin closer to the Group average within a few years by realising synergies and taking advantage of cross-selling opportunities. With this in mind, we believe that we have made not only a strategically outstanding investment but also one that is financially attractive."
With the York acquisition, SAF-Holland is continuing to increase its footprint outside of the existing core markets of Europe and North America. Only recently, the Company announced the establishment of a new production centre on more than 46,000m2 in Yangzhou, China, which is scheduled to commence operations in the first half of 2019.