Automotive supplier Continental will acquire Veyance Technologies from The Carlyle Group for approximately 1.4 billion in euros. Based in Fairlawn, Ohio, Veyance is a maker of industrial and automotive rubber products.
Hanover/Fairlawn – Continental will expand its global industrial business via a significant acquisition: The international automotive supplier, tire manufacturer and industrial partner headquartered in Hanover, Germany, announced today that it has concluded an agreement with The Carlyle Group, Washington D.C., USA, relating to the purchase of Veyance Technologies Inc, Fairlawn, Ohio, USA, for approximately 1.4 billion Euros. Veyance operates globally in the field of rubber and plastics technology and in 2013 recorded sales of approximately 1.5 billion Euros, around 90 percent of which were achieved outside the automotive industry. Veyance has 27 plants around the world and a workforce of about 9,000 employees at the end of 2013. The acquisition is subject to the approval of the responsible anti-trust authorities.
“Veyance’s business and geographic presence complements Continental’s existing global footprint, and the planned integration of Veyance into our ContiTech division will expand our position in rubber and plastics technologies on a worldwide basis. Furthermore this acquisition will enable Continental to come a step closer to its strategic goal of increasing further our proportion of sales to industrial customers and private end users. ContiTech itself will achieve some 60 percent of its sales outside the automotive OE sector in future,” said Dr. Elmar Degenhart, Chairman of Continental’s Executive Board in Hanover. “Veyance will make an immediate positive contribution to the corporation’s profitability once the transaction has been concluded. The acquisition can be financed from cash and available credit lines.”
“Veyance Technologies will complement our ContiTech division in key markets where our presence is limited, particularly in the US and South America. Plants in Mexico, Canada, China, Australia and also South Africa will provide additional opportunities,” explained Heinz-Gerhard Wente, Member of the Executive Board of Continental AG and CEO of the ContiTech division. “Veyance and ContiTech complement each other geographically, and ContiTech’s Conveyor Belt Group and Fluid Technology business units in particular will benefit from an enhanced global presence. The Power Transmission Group and Air Spring Systems also will achieve positive results from the merger.”
“We are proud of what the Veyance management team has accomplished and believe the combination of Veyance and Continental will even more effectively meet customers’ needs globally,” added Martin Sumner, Managing Director of The Carlyle Group. In 2013 ContiTech’s and Veyance’s merged pro forma sales will add-up to approximately 5.4 billion Euros, and they employ about 39,000 people worldwide. Veyance Technologies achieves about half of its sales in the US. Other important markets are Latin America, Africa, China and further Asian countries. The product focus is on conveyor belts, hoses, power transmission belts and air springs.
“ContiTech and Veyance are a great fit for each other,” says John S. Hamilton, Chief Executive Officer of Veyance Technologies Inc. “In addition to the complementary geographic and product mix, we bring an organization and culture which delivers on our commitments to customers, employees, and our communities. We look forward to becoming valuable members of the ContiTech team to continue building upon our shared culture of innovation and providing value to customers.”
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With provisional sales of around €33.3 billion in 2013, Continental is among the leading automotive suppliers worldwide. As a supplier of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also an expert partner in networked automobile communication. Continental currently has more than 177,000 employees in 46 countries.
The ContiTech division numbers among the leading suppliers of a host of technical rubber products and is a specialist for plastics technology. The division develops and produces functional parts, components and systems for the automotive industry and other important industries. ContiTech currently has a workforce of approximately 29,700 employees. In 2013 it recorded provisional sales of about €3.9 billion.