NOIDA, INDIA (July 13, 9:15 a.m. ET) — Samvardhana Motherson Group, an Indian automotive supplier, is buying a majority share in Peguform GmbH, one of Europe's largest plastics processors.
B"tzingen, Germany-based Peguform makes automotive thermoplastic interior and exterior parts. The company announced the deal July 13.
According to reports, Samvardhana Motherson is acquiring an 80 percent stake from Peguform's present owner, Wels, Austria-based Cross Industries AG, which will retain a 20 percent share.
The deal will go through within three months, subject to European cartel office approval is received.
Peguform's CEO Klaus Rinnerberger describes the deal as “a strategic partnership that will further accelerate the growth of our company, especially in new international markets.”
Peguform has 7,000 employees, at 16 plants in seven countries — Germany, Spain, Portugal, Slovakia, Brazil, Mexico and China.
Samvardhana Motherson has more than 40,000 employees and specializes in mirror and vehicle cabling systems at 90 plants in 23 countries.
Peguform reported 2010 sales of about 1.4 billion euros and forecasts sales of 1.7 billion euros in 2011, making the company one of Europe's leading plastics processors. The company has had a checkered history, with many owners since it was established as Badische Plastikwerke in 1959 and later renamed as Peguform-Werke in 1978. Its various earlier owners have included BAT, Pegulan and Kl"ckner.
Fraser, Mich.-based Venture Holdings Co. LLC acquired Peguform in 1999, but was not in a position to prevent Peguform filing for insolvency in 2002, as it had also filed for insolvency. Peguform continued operations and investment in machinery while still insolvent however, being supported financially by its automotive OEM customers, as a supplier “too big to fail.”
Financial investment company Cerberus acquired the thermoplastic molding operations in Germany, Spain, Mexico and Brazil from the insolvency administrator in 2005, then selling Peguform to Polytec Holding in August 2008.
Peguform's sales recovered to 1.1 billion euros in 2009. That was the year the company became an independently operating company. In August 2009, Polytec Holding ran into financial difficulty during the worldwide financial crisis and decided to sell Peguform to Sarpedon Management Consulting, managed by Stefan Pierer and Rudolf Knünz.
This resulted in Cross Industries became effective majority owner of Peguform.
Peguform strengthened its position in lightweight automotive construction by acquiring in October 2010 when it bought a 51 percent holding in Wethje group, which makes carbon fiber reinforced composites for the automotive industry.
In April 2011 Rinnerberger told the local Badische Zeitung newspaper “we cannot stay where we are, we are too large for a niche supplier and too small for an important international player.” But Klaus Amman, chairman of the Peguform works council, added that it is exaggerated when the automotive trade considers sales of 3 billion euros as the minimum to be a large player, yet to remain independent.
The newspaper reported Rinnerberger, who came to Peguform from Magna International Inc., as confirming at the time that there had been talks with Aurora, Ontario-based Magna.
According to the Badische Zeitung report, delegations from French, U.S. and Indian companies had visited Peguform in B"tzingen and expressed interest in the company. Rinnerberger told the newspaper that there was no need to hurry and that he expected that no decision would be made before Dec. 31, 2012. This was the deadline for Pierer und Knünz to repay the 110 million euros borrowed from banks in order for Cross Industries to purchase Peguform in 2008.