(MENAFNEditorial)
Established in 2008, HSC is a joint venture
between Halla Holdings Corporation ("Halla Holdings") of Korea and Stackpole
International. Since the acquisition of Stackpole International by Johnson
Electric in October 2015, HSC has been a 30% owned affiliate of the Johnson
Electric Group. Upon completion of the
acquisition of an additional 50% equity interest from Halla Holdings, Johnson
Electric's ownership interest in HSC will increase to 80%.
HSC, headquartered in Ochang, Korea, is a
major supplier of powder metal components to the automotive industry in Asia
with consolidated revenues for the year ended 31 December 2016 of Korean Won
158 billion (approximately US$141 million).
The business operates two production facilities -- one in Korea and one
in China -- and employs over 500 people.
Dr. Patrick Wang, Chairman and Chief
Executive of Johnson Electric, said: "This is an attractive opportunity to
increase the Group's exposure to the rapidly growing powder metal market in
Asia. Stackpole International is already
a recognised market leader in the powder metal industry in North America and
this complementary investment provides a platform for accelerating sales growth
and strengthening the Johnson Electric Group's position as a global supplier to
key engine, transmission, suspension and steering applications that contribute
to improved fuel economy, reduced emissions and increased passenger comfort."
Johnson Electric has agreed to increase its
ownership interest in HSC in an all-cash transaction that values the additional
50% equity interest at Korean Won 93.9 billion (approximately US$83.8
million). Johnson Electric will finance
the acquisition with a combination of its current cash balances and proceeds
from existing revolving credit facilities.
The transaction is expected to close in the second quarter of 2017,
subject to customary conditions including obtaining applicable regulatory
approvals.
Ropes and Gray LLP and Yulchon LLC are acting
as legal advisers to Johnson Electric.
About
Johnson Electric Group
The Johnson Electric Group is a global leader
in electric motors, actuators, motion subsystems and related electro-mechanical
components. It serves a broad range of industries including Automotive, Smart
Metering, Medical Devices, Business Equipment, Home Automation, Ventilation,
White Goods, Power Tools, and Lawn & Garden Equipment. The Group is
headquartered in Hong Kong and employs over 37,000 individuals in more than 20
countries worldwide. Johnson Electric
Holdings Limited is listed on The Stock Exchange of Hong Kong Limited (Stock
Code: 179). For further information, please visit: www.johnsonelectric.com.
Forward
Looking Statements
This
news release contains certain forward looking statements with respect to the
financial condition, results of operations and business of Johnson Electric and
certain plans and objectives of the management of Johnson Electric.
Words
such as "outlook", "expects", "anticipates", "intends", "plans", "believe",
"estimates", "projects", variations of such words and similar expressions are
intended to identify such forward-looking statements. Such forward looking statements involve known
and unknown risk, uncertainties and other factors which may cause the actual
results or performance of Johnson Electric to be materially different from any
future results or performance expressed or implied by such forward looking
statements. Such forward looking statements
are based on numerous assumptions regarding Johnson Electric's present and
future business strategies and the political and economic environment in which
Johnson Electric will operate in the future.
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