Cooper Standard Holding Inc.'s streamlining efforts took another step forward with the signing of an agreement to divest its European rubber fluid transfer and specialty sealing businesses.
Mutares SE & Co. KGaA will acquire two manufacturing facilities in Poland, one in Spain and another in Italy, according to a Cooper Standard news release. All of the company's operations in India also will be transferred, with the exception of the corporate IT development office in Chennai.
The moves affect 2,500 employees. Financial terms were not disclosed, but Novi, Mich.-based Cooper Standard did note that it expects the deal, subject to approval by relevant antitrust authorities, to be completed by the end of the 2020 second quarter.
"This transaction, when closed, will enable us to focus company resources on our businesses that provide the greatest opportunity for growth and profitability," Jeffrey Edwards, Cooper Standard chairman and CEO, said in a statement. "It is consistent with strategic initiatives that we have discussed for the past several quarters, and we expect it will be immediately accretive to our earnings and cash flows going forward."
Cooper Standard said it would work closely with Mutares and all involved parties to help ensure a smooth transition for all stakeholders.
This marks the second divestiture Cooper Standard has made in the last 13 months. In April 2019, Cooper divested its anti-vibration systems business to Continental AG for $265.5 million. That transaction included facilities in Auburn, Ind.; Mitchell, Ontario; and Rennes, France, as well as AVS-related assets in Poland and China.
Continental also received equity interest in a joint venture in India.
Cooper Standard has been in the process of streamlining its operations for more than two years. In March 2020, the company disclosed that it would close two "significant manufacturing facilities," a move driven by customer demand as well as streamlining priorities.
The planned closure of the two plants came on the heels of a 2019 decision to close 10 plants — six in Asia, three in North America and one in Europe.
In discussing the plant closures earlier this year, Cooper Standard officials offered sales guidance of $2.85 billion to $3.05 billion for 2020, and said it engaged in a strategic review process, considering alternatives for unprofitable operations.
"We believe the challenging market conditions that have persisted for the last 18 to 24 months are the new normal for the auto industry," Edwards said at the time. "In an environment of slow to negative growth, we have to be more focused than ever before on improving efficiency, providing world-class quality service and innovation to customers, and driving the business to improve cash flow and returns on invested capital. And, we are."