SAF-HOLLAND, the globally active supplier to the truck and trailer industry and Corpco Beijing Technology and Development Co., Ltd. (“Corpco”) today have entered into a definitive share purchase agreement for SAF-HOLLAND to acquire 80 percent equity of Corpco Beijing Technology and Development Co, Ltd. In a first step a joint venture will be formed with a pull option regarding the remaining 20 percent of shares.
With revenues of around 18 million Euros in 2012 and 180 employees Corpco is a leading producer of commercial vehicle suspensions systems in China. Its products are proven and suitable for global markets. The acquisition will expand the presence of SAF-HOLLAND’s Business Unit Powered Vehicles Systems into the Emerging Markets, especially in China. Both companies will combine their resources to provide continuous product improvements and new technologies across the commercial vehicle range in China and certain export markets.
“We are pleased that we have gained with Corpco a strong partner which will help us to further explore the growing market for truck and bus suspensions in China. The combination of the organizations is a perfect move as both, SAF-HOLLAND and Corpco, are major suppliers of suspension systems with strong brands in their respective markets”, said Detlef Borghardt, CEO of SAF-HOLLAND.
Synergy potentials are expected from the global sales network of SAF-HOLLAND, its good regional footprint in North America and Corpco’s excellent market position in China. The combination of technologies and Corpco’s strong brand with SAF-HOLLAND’s well established Neway brand brings additional benefit. The Neway brand for suspensions stands for tough, durable and reliable products with a long and proven history whereas the Corpco brand is known for speed to market and a broad portfolio resulting in increased export opportunities. Additional benefits are expected from the combination of the dense Aftermarket network of Corpco and SAF-HOLLAND. With the acquisition SAF-HOLLAND becomes less dependent from the economic cycles in the truck and trailer industry in Europe and North America.
Corpco Beijing is a leading Chinese company engaged in the production and sale of suspensions for the coach and bus markets in China and is one of the market leaders for state-of-the-art suspension systems. The company was founded in 1992, and through corporations with Neway, acquired by Holland in 1999, starting in the late 1990’s began selling and distributing SAF-HOLLAND’s Neway branded suspensions for the developing coach and bus suspension market in China. The company expanded its product range through internally developed products and started a manufacturing operation in Baotou, Inner Mongolia. Corpco has a well-established Aftermarket network that includes over 70 service stations, 43 spare parts warehouses and four parts distribution centers.
“We are delighted to deepen our partnership with SAF-HOLLAND. Since 1997 we have a long successful relationship and the bundling of our forces in a joint venture is a logical development to even increase our market power with the very well-positioned brands Neway and Corpco in the future”, noted Tom Yu, CEO of Corpco Beijing Technology and Development Co., Ltd.
SAF-HOLLAND, a global leader in the manufacturing of coupling products, axle and suspension systems and components for the commercial vehicle market can be traced back for over a century. The Business Unit Powered Vehicle Systems produces especially suspension systems for trucks and buses and fifth wheels for trucks. With the joint venture SAF-HOLLAND rounds its existing product portfolio. The acquisition is financed by the proceeds from the capital increase in December 2012 and from the bond which was issued in October 2012.
The transaction is subject to regulatory review and approval and customary closing conditions. The closing of the transaction is expected in the fourth quarter of calendar year 2013.