Supplier using new profits to expand globally.
Magna Seating, an operating group of Magna International, one of the world’s largest automotive suppliers, is expanding its presence in South America with the acquisition of automotive seating supplier Resil Minas.
The new entity will operate under the name Magna Seating Brazil. Terms of the acquisition were not disclosed, but Resil Minas, of Sao Joaquim de Bicas, Brazil, recorded sales of approximately $174 million in 2009 and is the largest supplier of seat frames and stampings in South America. Automotive customers include Fiat, Ford, General Motors, Volkswagen, IVECO and PSA.
The acquisition, which includes three manufacturing facilities and approximately 1,400 employees throughout South America, increases Magna Seating’s global footprint, diversifies its product portfolio, and positions the company as a leading supplier of automotive seating solutions in South America, Magna officials said.
“The acquisition represents a significant commitment to the South American automotive market and our global OEM customers,” said Joe Pittel, President of Magna Seating. “With strong vertical integration in South America, we have a clear competitive advantage and can immediately support the global platforms of our OEM customers,” he said.
Executives at Magna, which has emerged from the recession as one of the healthiest suppliers in the automotive business, have said they planned to use the company’s financial reserves to make strategic acquisitions –such as Resil Minas.
The Brazilian deal follows the announcement that Magna’s revenues soared 27% during the third quarter, while its earnings increased nearly five-fold to $241 million, or $2.06 per share, from $31 million, or 45 cents per share, in the same quarter of 2009.
Magna expects revenues to reach between $23.5 billion and $24 billion and earnings could near $1 billion. Magna also announced a 20% increase in dividends last week, and a 2-for-1 stock split.
Earlier this month Magna Seating also announced the establishment of a manufacturing facility in the São Paulo area to meet new customer requirements. The new facility is expected to produce complete seats for General Motors.
Magna Seating is considered a leader in the development and manufacture of high-quality complete seat solutions and seat mechanisms for the global automotive industry, with capabilities ranging from consumer and market research, full concept development, design and engineering, testing and validation to world-class manufacturing of seating components and complete seat assemblies.