Lear targets acquisitions to enhance electrical unit
TRAVERSE CITY, Mich. -- Lear Corp. is searching for acquisitions of as much as $1-billion for its electric unit as auto makers' demand for international vehicle platforms drives consolidation amongst their their providers.
Lear currently is the 2nd-biggest manufacturer of vehicle seats and gets about three quarters of its own gross income with that company.
Nevertheless, the electric unit, which provides control components and techniques, is more lucrative, yielding 46% of operating gains a year ago from of a quarter of the organization 's $17.7 billion in revenue.
The drive would be to add capacity in applications, information encryption and cloud-computing, CEO Matt Simoncini stated in a interview Thursday at the VEHICLE Management Briefing Seminars here.
"You will see an increasing number of nontraditional acquisitions of computer software companies that provide intellectual-property to the business from outside of automotive and and that is a place where we have been been quite actively seeking," he stated.
Vehicle sales in the US, led by pick-ups and sport utility vehicles, are soaring, supporting gas a spurt of amalgamations among auto parts manufacturers, including ZF Friedrichshafen A-G May acquisition of TRW Automotive Holdings Corp. to produce the market 2nd-biggest provider.
A resurgent U.S. market, broadly accessible credit and low-interest rates are maintaining the revenue rate near amounts not seen in ten years or more.
Lear's investigation to enlarge its electric unit is "driven less by the borders and more because there are far more places to develop there," he mentioned. "The business is bursting because sub-section also it needs one to stay on top of specific abilities, in our situation applications as you go from transferring electricity to transferring information."
The Southfield, Mi-based provider's last two acquisitions were to reinforce its seats unit.
In January, Lear purchased Eagle Ottawa, a manufacturer of leather for vehicle interiors, for $850 million. In the year 2012, it got material manufacturer Guilford Mills for $257 million.
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