Magna is getting the division from New York-primarily based investment agency SSW Partners LP, which owns VeoneerNathan Denette/The Canadian Press
Magna Global Inc. MG-T has expanded its advanced driving technologies business with the US$1.5-billion order of Veoneer LLC’s active protection division.
Stockholm-dependent Veoneer can make motor vehicle radar, digital camera and other checking devices. The all-dollars obtain of the division will complement Magna’s product lines and boost its information per car, whilst positioning the Aurora, Ont.-based mostly car or truck and parts maker as a leader in the quick-growing current market of advanced driver aid programs (ADAS), reported Magna main executive officer Swamy Kotagiri.
“It also adds significant engineering methods and computer software know-how,” Mr. Kotagiri mentioned on a meeting simply call with analysts on Tuesday.
Magna is obtaining the division from New York-primarily based financial commitment organization SSW Associates LP, which owns Veoneer. The energetic basic safety company has forecast yearly profits worth US$1.1-billion, 3,700 workforce, four production web-sites and 15 engineering offices in eight nations.
“This transaction delivers an infusion of electronics engineering know-how,” Mr. Kotagiri claimed, noting the division employs 2,200 engineers who can support Magna’s other solution lines.
ADAS technology is made to boost highway basic safety by utilizing cameras and radar to detect pedestrians, lane markers, targeted traffic signals and blind places. The devices are made use of by automakers in almost everything from cruise manage to headlight configurations.
Mr. Kotagiri claimed the new business mixed with Magna’s ADAS items will see 30-for each-cent growth by 2024 to US$3-billion. The international current market is anticipated to arrive at US$50-billion by 2030, he mentioned.
Mark Neville, a Bank of Nova Scotia inventory analyst, mentioned in a observe to purchasers he likes the deal. “It adds major scale and capabilities to Magna’s ADAS small business,” Mr. Neville said. “It puts the equilibrium sheet to function without stressing it, and it was done at a fair valuation.”
Magna executives on the convention get in touch with declined to say where by Magna ranks in the world-wide ADAS market, outside of describing the firm as a “leader.” Pat McCann, Magna’s main monetary officer, claimed the purchase does not arrive with debt obligations, excluding pensions and leases. “It’s mainly a dollars-free, personal debt-absolutely free transaction,” Mr. McCann explained.
Magna’s current ADAS small business had a lot more than US$550-million in sales previous yr, out of the company’s overall revenue of US$36-billion. Magna makes entire motor vehicles and car or truck elements at factories all around the earth, utilizing extra than 158,000 persons at 343 production facilities. Its 2021 revenue was US$1.6-billion.
SSW Partners was established in 2021 by 3 veteran financial investment bankers: Eric Schwartz, Joshua Steiner and Antonio Weiss.
Magna experienced signed a deal to purchase all of Veoneer very last calendar year, but failed to comprehensive the transaction after it was outbid by SSW Companions and chip maker Qualcomm Inc., which paired up to obtain the corporation in a offer valued at US$4.5-billion.
Qualcomm subsequently obtained Veoneer’s Arriver enterprise from SSW Associates for an undisclosed sum.
Veoneer CEO Jacob Svanberg claimed Magna is the correct very long-phrase dwelling for the active security small business.
“The mix of the two corporations results in sturdy benefit and accelerates an presently interesting progress trajectory for Veoneer’s workforce, solutions and shoppers,” Mr. Svanberg reported in a news launch.
Veoneer reported it carries on the method of getting the ideal very long-term dwelling for its restraint handle techniques business enterprise.
The sale of the active security business is predicted to close near the center of 2023, matter to regulatory approvals and other customary closing situations.
With data files from The Canadian Push