Linamar Corporation (TSX:LNR), Carolina Forge Company, LLC (“CFC”) and majority shareholders of Seissenschmidt AG (“Seissenschmidt”) today signed separate definitive agreements for Linamar’s purch ase of CFC’s business of high volume hot forged product, located in Wilson, North Carolina and 66% of the shares of Seissenschmidt, which also specializes in high volume hot forgings. Seissenschmidt has 3 primary locations in Germany, Hungary, and the United States. Combined annual sales of the two entities are expected to be close to $450 million CAD and the combined employee base is approximately 1,150 people.
Linamar has pursued these acquisitions because of the fit with its strategy of offering integrated metal forming/machined solutions to its customers in certain targeted products such as gears. The acquisitions will supplement Linamar’s core powertrain business, leverage its business in driveline, gear based products and enable Linamar to address the market trends in light weighting and NVH design for products like gears, differentials, wheel bearings, hubs and sprockets with high speed forging processes.
“We are very pleased with these results of months of work in developing our global forging strategy,” said Linda Hasenfratz, Linamar’s CEO, “CFC is well known and positioned in the North American market, where we intend to invest further and grow significantly and Seissenschmidt is considered a global leader in terms of excellence in high volume forging technology, a reputation built over its 160 year history. The capabilities of these talented employees greatly enhance our component and system expertise in key markets such as gears which will be an important driver in increasing market share. Gear manufacturing is a key strategy for Linamar and an integrated forged and machined product a key element in solidifying our global dominance in this highly opportunistic market.”
The acquisitions illustrate Linamar’s focus on innovation in manufacturing and advanced process capabilities and further its strategies of globalization and diversification. The CFC transaction is expected to close in the near future. The acquisition of the 66% interest in Seissenschmidt is subject to, among other things, further due diligence and regulatory approval.
