Acquisitive auto parts molder Motherson Sumi Systems Ltd. (MSSL) has agreed to purchase the Finland-based wiring harness and components producer PKC Group for around 571 million euros ($614 million).
Helsinki-based PKC, a Tier 1 supply specialist ib cable harnesses and related parts for commercial vehicles, has plants in 11 countries serving the automotive industry in Europe, North America, China and Brazil. It recorded annual sales of 846 million euros ($909.7 million) in 2016.
The takeover, due to be completed by the end of March, will be made through an MSSL subsidiary formed for the purpose, according to the buyer which is part of the Noida, India-based Samvardhana Motherson group.
This deal will enable MSSL, the Indian group's flagship company, to expand its presence in the niche international market of wiring harness products for commercial vehicles. PKC has a strong presence in this part of the American and European markets, which will help MSSL to grow there while MSSL will continue to offer strength in the Asia Pacific area.
MSSL, which specializes in producing passenger car mirrors, wiring harnesses and other plastic parts and modules, is also expanding its mirror manufacturing base in Hungary.
It recently bought the automotive business operation — including, land, buildings and machinery — of the Hungarian company Ábrahám és Társa Kft. for more than 10 million euros ($10.7 million). The local firm molds and assembles components, mainly for car rear view mirrors and lighting.
Ábrahám's plastics injection molding and parts finishing production units are centered in the southeastern Hungarian town of Túrkeve. Motherson group already operates other mirror plants in Hungary run by subsidiary Samvardhana Motherson Reflectec (SMR) at Mosonmagyaróvár and Mosonszolnok in the northwest.
MSSL said the Ábrahám plant, acquired late last year, is being expanded and will boost the in-house capability of SMR Hungary, enabling it to meet rising demand from European customers.
The company's biggest growth in Europe came in 2011 with its purchase of the former German auto molder Peguform GmbH, which brought it extensive mirror business in the region.
MSSL said the PKC purchase fits into its ‘Vision 2020' growth strategy to achieve 16.7 billion euros ($17.9 billion) in revenue by 2019-20. For the year to March 2016, the company achieved sales worth 5.3 billion euros ($5.7 billion).
The flagship Motherson group offshoot has grown rapidly in recent years thanks in part to the 14 acquisitions it has made since 2002.