Valeo has inked a deal with Deutsche Beteiligungs, a listed private equity company, to acquire bus air conditioning manufacturer, Spheros, although the fee was not disclosed.

With annual revenue of around EUR250m (US$273m), Spheros supplies air conditioning systems to all main bus manufacturers and major fleet operators and has plants in Germany, Finland, Turkey, the US, Brazil, China and India.

The acquisition will allow Valeo to extend its thermal management activities to the bus market, which is expected to grow by more than 5% annually during the coming years, driven by the expansion of public transportation throughout the world at a time of accelerating urbanisation.

The transaction is subject to the approval of the relevant anti-trust authorities.

"Following on from the Peiker acquisition announced on 21 December," the acquisition of German company Spheros is aligned with Valeo's external growth strategy, which is based on acquiring companies whose technological leadership is recognised by their customers and who are leaders in high-growth markets," said Valeo CEO, Jacques Aschenbroich,

"Spheros' product portfolio, which is a fit with Valeo's Thermal Systems Business Group, represents a growth driver. We are delighted to welcome Spheros' 1,100 employees to Valeo."