SAF-HOLLAND S.A. acquires majority interest in Brazilian suspension specialist KLL
SAF-HOLLAND acquires majority interest in Brazilian suspension specialist KLL
Luxembourg, September 8, 2016 - SAF-HOLLAND has acquired a 57.5% interest in the Brazilian manufacturer of suspensions systems for trucks, buses, and trailers KLL Equipamentos para Transporte Ltda (KLL) headquartered in Alvorada, Rio Grande do Sul. Agreements with the family owners of KLL were signed yesterday.
KLL is one of the leading suppliers of air suspension systems for trucks, buses and trailers, in addition mechanical and air suspensions as well as axles for trailers. KLL currently employs around 200 people at its production site in the city of Alvorada near Porto Alegre. The company's customers include nearly all of the major manufacturers of trucks, buses, and trailers in the Brazilian vehicle market. The acquisition gives SAF-HOLLAND direct access to key truck customers for its truck-related product range and, at the same time, positions SAF-HOLLAND as a market leader for air suspension systems for buses. It also further expands SAF-HOLLAND's market share for trailer axles and suspension systems and augments its technology portfolio by adding mechanical suspension systems.
SAF-HOLLAND expects closing of the acquisition sometime in the fourth quarter of 2016. SAF-HOLLAND intends to include KLL into SAF-HOLLAND Group's scope of consolidation as of October 1, 2016. The companies agreed not to disclose the purchase price. The founding family will retain the remaining 42.5% interest in KLL. SAF-HOLLAND has a purchase option for this interest that can be exercised in the future. KLL's former owner and executive director, Juarez Keiserman, will continue to hold an executive position and contribute to the company's further growth as part of the SAF-HOLLAND Group. Rogerio Ramos, the current CEO of SAF-HOLLAND's Brazilian operation will remain as CEO and lead the business together with Mr. Juarez Keiserman.
In a difficult Brazilian vehicle market, which is still marked by years of decline in production figures, KLL expects sales for full-year 2016 to reach approx. EUR 10 million and a break-even EBITDA. Looking to the years ahead and the present order situation, SAF-HOLLAND expects that rising sales at KLL will allow it to return to the EBIT-margins achieved in a normal year which were above current SAF-HOLLAND Group average. KLL has recently received important new orders in both the bus and truck segments, which will ramp up in production in 2017 and 2018.
In the course of the acquisition, SAF-HOLLAND's existing activities in Brazil will be consolidated, which will lead to cost savings and efficiency improvements.
"This acquisition signifies another step in implementing our growth Strategy 2020. We are making a counter-cyclical investment in the medium-term development of the largest transport market in South America with more than 200 million people and are thereby significantly expanding both our market position and our technology portfolio in Brazil. KLL gives us much swifter access to the highly attractive market for air suspension systems for trucks and buses and in addition to that strengthens our foothold in the trailer sector," said SAF-HOLLAND's CEO Detlef Borghardt in his comments on the acquisition.