SAF-Holland completes two major acquisitions

Global equipment specialist, SAF-Holland, has acquired trailer axle and suspension system manufacturer, York Transport Equipment – Asia, following the announcement of its majority ownership of Italian tow coupling business, V.Orlandi.

According to SAF-Holland, the purchase price for the stake in York, including all liabilities, is €33 million, and is anticipating a contribution to SAF-Holland Group sales of around €50 million with an adjusted earnings before interest and taxes (EBIT) margin in the mid-single-digit percentage range. The closing of the transaction and the subsequent inclusion in SAF-Holland Group's scope of consolidation is expected Q2 2018.

The York Group reportedly has a strong market position in the Asia Pacific region, particularly in the heavy-duty segment (> 9 tonnes) 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 York Group operates major production sites in Pune, India, and Qingdao, China, and supplies most of the major truck and trailer manufacturers in the region. Next to India, the York Group also has significant operations in other fast-growing Southeast Asian markets, such as Thailand, Indonesia and Vietnam besides Australia. This geographical positioning complements the regional presence of the SAF-Holland Group.

Over the past few years, the York Group has built a strong service and spare parts network in India with more than two hundred service points. This network will effectively strengthen the aftermarket business of the SAF-Holland Group in the region.

“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,” said SAF-Holland CEO, Detlef Borghardt.

“We will become one of the market leaders in India, one of the fastest growing transportation markets in the world, almost overnight.

“This will also allow us to position ourselves early on for the foreseeable changes in many of these markets towards more technologically sophisticated solutions. We expect the load and safety regulations in other APAC countries to be tightened gradually over the next few years – similar to what we are currently seeing in China. Based on its product portfolio, SAF-Holland is well-equipped for the upcoming changes,” he said.

In addition to securing York Transport Equipment, SAF-Holland acquired a 70 per cent stake in Italian coupling system specialist, V.Orlandi.

The purchase will cost approximately €39 million. The parties have also agreed to grant SAF-Holland a call option for the rest of the company, which can be done at a later date.

The deal is expected to be completed by the end of Q2 2018, at the latest.

SAF-Holland noted that the V.Orlandi acquisition will enable it to strengthen its position “as the second largest player in Europe” and expand its specialty business with couplings and drawbar eyes for trailers and specialised commercial vehicles.

V.Orlandi generates around 20 per cent of sales with coupling systems for agricultural and forestry vehicles.

The company will continue to operate as an independent business unit under the established V.Orlandi brand. As part of the Group, V.Orlandi will also benefit from the additional growth prospects and use the global production and sales infrastructure to roll out its product range worldwide, SAH-Holland added.

Currently V.Orlandi employs 60 people and targets Western Europe, Russia, Asia and Australia. SAF-Holland has estimated the company will contribute €22 million in sales in the first full year following the acquisition.

Dr Matthias Heiden, Chief Financial Officer, SAF-Holland, said the acquisition will be funded entirely from the company’s existing cash.

“The acquisition of V.Orlandi will already make a positive contribution to the Group's earnings in the first year and have a slight margin-accretive effect,” Heiden said.

Detlef Borghardt, CEO, SAF-Holland, said the acquisition is the next step in the company’s 2020 growth strategy.

“First, we are strengthening our strategic market position in fifth wheels and expanding our know-how in coupling systems for trailers and specialty vehicles,” Borghardt said. “Second, we are expanding our presence in important regional markets such as Russia, the Middle East and Australia. V.Orlandi also has a strong spare parts and accessories business that combines well with our Aftermarket activities.”

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