One Equity Selling EMCON Technologies

PARIS (Reuters) – Car parts group Faurecia (EPED.PA) has struck a deal to buy EMCON Technologies, a U.S. company with 2008 sales of 2.4 billion euros ($3.55 billion) and a key presence in the fast-growing market for clean emissions cars.

“This deal is in line with our company strategy introduced in February 2009. It reinforces our leading position on the market for emissions control technologies, which will boast strong growth over the coming years,” Faurecia Chairman and Chief Executive Yann Delabriere said in a statement.

French group Faurecia said it would fund the EMCON deal by issuing 20.9 million new Faurecia shares. The acquisition is expected to be closed early next year.

The company did not say how much it was paying for EMCON. However, with Faurecia shares up 4.4 percent at 13.79 euros in early afternoon trading, this would imply that Faurecia is paying 288 million euros.

Agilis Gestion fund manager Arnaud Scarpaci said the acquisition was a good one since it strengthened Faurecia’s presence in the United States, where Ford’s (F.N) third-quarter profit showed that the automobile sector is starting to recover from the effects of the financial crisis.

“The acquisition will be well regarded. The U.S. car sector will be one of the first to benefit from an exit from the crisis,” said Scarpaci, who added that he was considering buying Faurecia shares.

Faurecia said it expected the acquisition to generate annual synergies of around 60 million euros and to be accretive for Faurecia’s earnings from the 2011 fiscal year onwards.

French car manufacturer PSA Peugeot Citroen (PEUP.PA) will remain Faurecia’s controlling shareholder following the completion of the EMCON acquisition, with PSA Peugeot holding 57.4 percent of Faurecia’s capital.

Delabriere told reporters in Paris that Faurecia would consider further acquisitions in the future but would concentrate for the time being on completing the EMCON deal.

Faurecia raised its forecasts last month despite posting a 21 percent drop in third-quarter sales, saying it now felt more optimistic about the second half of the year.

Faurecia has a current market capitalization of around 1.2 billion euros. Its shares have risen around 80 percent so far this year, recovering from an 80 percent fall last year.

($1=.6769 Euro)

By Sudip Kar-Gupta and Matthias Blamont
(Editing by Jon Loades-Carter and Simon Jessop)

peHUB Note: EMCON Technologies is currently owned by One Equity Partners.