Magna to acquire German supplier Ixetic for $397 million
Canada’s Magna International Inc. plans to buy Ixetic Verwaltungs GmbH, a German maker of automotive vacuum, engine and transmission pumps, for about 308 million euros ($397 million).
"Ixetic's technologies, footprint and diverse customer base make it an excellent fit with our current capabilities in engine and transmission pumps" Magna CEO Don Walker said today in a statement. "Together, our global reach and capabilities position us to support our combined customers and their desire for more efficient powertrain solutions."
Ixetic was created in 2006 and posted 300 million euros ($387 million) in revenue in 2011. It operates two manufacturing plants in Germany and one each in Bulgaria and China.
“In the scope of automotive transactions, the Ixetic deal is relatively rich at 1x sales,” Wells Fargo analyst Richard Kwas said in a report, referring to the purchase price nearly matching Ixetic’s annual sales. “However, the company is German-based and likely has an attractive customer mix (German premium OEMs, etc.).”
The transaction is expected to close in the fourth quarter, Magna said.
Kwas said that the business is likely to generate an operating profit margin -- earnings before interest and taxes -- above Magna’s corporate average, which is in the 5 percent range.
Separately, Magna, through one of its units, signed an agreement with a joint venture partner to buy the remaining 50 percent interest in STT Technologies Inc., a supplier of transmission and engine oil pumps. The deal is expected to close this month.
Magna, of Aurora, Ontario, ranks No. 4 on the Automotive News list of the top 100 global suppliers with worldwide parts sales to automakers of $28.3 billion in 2011.
The company’s shares closed at $44.06 today on the New York Stock Exchange, up 80 cents.