Magna International Inc. is calling its first acquisition in the European auto seating business just that - the first.
The Markham, Ontario, supplier of interior systems wants to acquire other European firms, increase its European business, and even begin new operations as the opportunity arises.
Last week Magna announced the purchase of Tricom Group Holdings Ltd., a British supplier of seats to Ford Motor Co., General Motors and the Rover Group. The $51.8 million purchase price gives Magna a supplier in the United Kingdom with annual revenues of approximately $100 million.
'This is our first strategic move into Europe,' said Graham Orr, Magna's executive president of corporate development. 'We have other initiatives under way for additional acquisitions, as well as greenfield initiatives.
'This is the beginning of our expansion into the seating business there,' Orr said.
Orr said that Magna holds the No. 3 market position in North American seating, with North American sales of about $1 billion. He said the company wants to grow to the same position in Europe.
'We want to be a major Tier 1 supplier in each of our businesses,' Orr said. 'By that we mean being among the top three or four system suppliers in each core business.' Lear Corp. and Johnson Controls Inc. are the biggest U.S. seat companies. Magna ranks No. 7 on the Automotive News list of top suppliers of original equipment to North America. Last year Magna did $3.9 billion in North American OEM sales and $4.8 billion worldwide.
Orr said Magna, like its major world competitors, is looking at German supplier Keiper Recaro GmbH & Co.'s planned sale of its completed-seat unit. That operation does about $1.5 billion in annual European sales. Magna and Keiper Recaro have a joint venture in North America.
Orr said the company also is pursuing acquisition talks with other European seat makers.
Magna's interiors operations have grown rapidly in the past year through acquisitions in the United States and Europe. Last October, Magna bought U.S. seat maker Douglas & Lomason Co. for $135 million. That deal gave Magna additional annual revenues of about $560 million.
Last week, Magna said it also has completed its recently announced plan to acquire German sound insulation supplier Georg Naher GmbH for $31 million. Last year Magna acquired United Kingdom instrument panel maker Marley PLC.