DETROIT - Breed Technologies Inc., a maker of airbag systems, said it acquired an Italian interior components manufacturer to further its long-term strategy of producing cockpit parts and steering wheels integrated with air bag systems. Breed, based in Lakeland, Fla., said July 1 that it acquired Gallino Plasturgia srl and affiliates from IAO Industrie Riunite SpA.
Company founder Allen Breed said the firm paid about $125 million for Gallino. He called the deal a bargain, because the purchase price was about half of Gallino's annual sales. Automotive suppliers often fetch purchase prices approximating 70 percent of annual sales, he noted.
Gallino, which Breed said was the third-largest supplier of steering wheels in Europe, has 12 plants in Italy where interior components are made and sales of $250 million.
``We see the future as air bags and sensoring integrated into interior components,'' Breed spokeswoman Lisa Spinazzola said.
By supplying an entire system or component, Breed also hopes to lower costs and improve the fit and finish of parts, she said.
Gallino, based in Turin, Italy, produces steering wheels, instrument panels, bumpers and other plastic trim for original equipment and aftermarket customers. The company has about 90 percent of the steering wheel business at Fiat Auto SpA, its largest customer, Breed said.
Gallino is the sixth acquisition in the past two years for Breed, and the second in the Italian steering wheel business. In April, the company announced it acquired MOMO Group of Milan, Italy, a maker of high-end steering wheels with sales of $65 million. The two Italian companies will nearly double Breed's sales, which totaled $400 million last year.
Besides Fiat, Gallino's major customers are BMW, Volkswagen and Opel.
Allen Breed said the company will do more than half its business in Europe next year.
Costs related to the Gallino purchase will cause a $5 million drop in analysts' estimated profits of $33 million for the quarter ending June 30. But Gallino should boost the parent company's earnings relatively soon, Breed predicted.
``The facilities and equipment are in very good shape,'' he said. ``We do not believe a big bubble of capital needs to go into this company. We are not looking for companies that need to be fixed.''
Breed is aiming for sales of $1 billion five years from now. More than half of that will come from overseas markets.