Lear has announced that it has signed a definitive agreement to acquire Eagle Ottawa.
Lear says that Eagle Ottawa will complement Lear’s position in luxury and performance automotive seating. The transaction is valued at US$850m on a cash and debt free basis. Lear intends to fund the transaction through a combination of cash on hand and debt. The closing of the transaction is expected to occur in the first quarter of 2015 subject to customary conditions, including regulatory approvals.
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“The acquisition of Eagle Ottawa is another important step in strengthening our core seating business, expanding our component capabilities and accelerating profitable sales growth,” said Matt Simoncini, Lear’s president and CEO.
“This transaction will further enhance Lear’s position as a global leader in automotive seating and will create significant value for our shareholders. Eagle Ottawa adds global leather design and development resources as well as technical expertise to our existing surface materials capabilities. Eagle Ottawa will also enhance the level of craftsmanship and design options that we are able to provide to our customers and increase opportunities for sales growth and diversification.”
Eagle Ottawa is the largest global supplier of automotive leather, with annual sales of approximately $1bn. Eagle Ottawa says it has a leading position in North America and Asia and is also a top supplier position in Europe. Eagle Ottawa has strong relationships with major global automakers, including BMW, Daimler, Fiat Chrysler, Ford, General Motors, Honda, Hyundai, Jaguar Land Rover, Mazda, Renault/Nissan and Toyota.
The transaction is expected to deliver sales and operating synergies. By combining design, product development and manufacturing capabilities in leather, fabric and our cut-and-sew operations, the company will be able to provide improved quality and craftsmanship, while reducing cost for its customers.
Citigroup Global Markets and Guggenheim Securities are serving as Lear’s financial advisors, and Winston & Strawn is serving as its legal counsel.
