Hahn & Co-owned Hanon agrees $1.2b bolt-on acquisition
Hanon Systems, an auto parts manufacturer owned by Hahn & Company and formerly known as Halla Visteon Climate Control, has agreed a $1.23 billion bolt-on acquisition of Magna International’s fluid pressure and controls business.
It is one of the largest outbound deals in Korea's auto parts industry and is expected to support Hanon's focus on hybrid and electric vehicles. Magna, a Canada-headquartered global automotive supplier with nearly $39 billion in annual revenue, chose to divest the business as a non-core asset.
The fluid pressure and controls business comprises 10 manufacturing and engineering facilities across Europe, North America, and Asia, with approximately 4,200 employees. Total sales came to $1.4 billion last year. It provides automakers thermal and energy management solutions – pumps and cooling fan technologies for thermal systems and transmission systems – that improve conventional and electrified powertrain efficiency.
"This business is a strategic fit to enhance our company's capability and competitive position with leading technology for conventional and electrified vehicles. With this acquisition, Hanon Systems is in a better position to satisfy the increasing demands of automakers for electrified thermal and energy management solutions," Y.E. Yoon, board chairman at Hanon and chairman of Hahn & Co, said in a statement.
The private equity firm agreed to buy Hanon for $3.6 billion in late 2014, committing capital from its second fund as well as from a co-investment vehicle raised solely for this transaction. Hahn & Co. holds a 51% stake in the Korea-listed business, while Hankook Tire has 19% and right of first refusal to buy the company outright within a certain timeframe.
Hanon, which generated sales of approximately $4.9 billion last year, is a leading provider of vehicle thermal management solutions. It produces air-conditioning systems for the interior of vehicles, thermal management systems that extract and re-use heat produced by engines, and cooling solutions for electric-powered and hybrid vehicles.
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