KOBLENZ (dpa-AFX) – The automotive supplier Stabilus (Stabilus SE) wants to strengthen its industrial business with the takeover of the US group Destaco. The deal is expected to “significantly” increase sales and make the company more profitable. The MDAX group wants to put 680 million US dollars (640 million euros) in cash on the table for the industrial automation specialist, as it announced on Thursday. The people of Koblenz only want to pay about a quarter out of their own pockets; the lion’s share should be paid with borrowed capital. The acquisition is expected to be completed in the first half of 2024, provided the relevant authorities give the green light. The news was received cautiously on the stock market. Shortly after trading began, Stabilus shares lost around 1.6 percent. Stabilus is currently worth around 1.3 billion euros on the stock market.
As company documents show, the previous owner Dover Corporation is to be paid around 150 million euros from its own coffers. The remainder is to be paid in equal parts as a revolving credit facility and bridge financing. Stabilus described the project as an “important next step” in implementing the long-term strategy.
According to CEO Stefan Bauerreis, the demand for automation options for production processes is likely to increase in the coming years. On the one hand, there is a relocation of production facilities from emerging countries back to industrialized countries such as Germany. But because there is a lack of skilled workers there, processes would have to be automated.
The company is also making significant changes internally at its headquarters in Koblenz. The automotive supplier wants to invest ten million euros in modernization and automation. At the same time, further jobs are to be cut. This should make the group “future-ready”.
The Stabilus board hopes that the acquisition will provide a significant boost to the balance sheet. Including synergies, revenue should increase by around nine percent annually until 2028. The operating margin (EBIT margin) is expected to increase to around 23 percent. Savings of more than 50 million euros are expected to result from a “common market presence, a broader customer base and a complementary product range”. In the first nine months of the current financial year (at the end of September), Stabilus had sales of almost 910 million euros, of which 12.7 percent remained as operating profit (EBIT).
According to Stabilus, Destaco had sales of $213 million in the last financial year. A fifth of this remained as earnings before interest and taxes (EBIT). The company, founded in 1915 in Auburn Hills (US state of Michigan), employed around 650 people at the time. Stabilus management promised to take over the entire workforce and all 13 locations. Destaco is to be continued as an independent brand under the corporate umbrella./ngu/knd/tih
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