Martinrea International Inc. Announces Agreement to Purchase Structural Components for Passenger Cars Division of Metalsa S.A. de C.V. - Seite 2

Pat D’Eramo, Martinrea’s President and CEO, stated: “We are very pleased to announce the pending acquisition to our company and to our Lightweight Structures commercial group. These locations align with our current base and will give us a broader global footprint expanding our product offerings and manufacturing capabilities. We will continue to increase our collaborative efforts with key customers such as Daimler and BMW. This acquisition will strengthen our engineering presence in Europe. This acquisition will also give us a very strong engineering presence in Germany for European based customers, which can be combined with our aluminum expertise in Meschede to provide more advanced lightweight solutions to our global customers. The Metalsa locations have some great processes and leading edge technologies in joining multi-materials further promoting our lightweighting strategy, including hot stamping and paint, as well as composite capabilities. We are excited to welcome a new group of creative and motivated team members into the Martinrea family to continue to build a great future together.”

Fred Di Tosto, Martinrea’s CFO, stated: “Not only does this enhance our footprint and capability, but we believe the acquisition will be accretive to our earnings and other metrics over time. The assets to be acquired require some restructuring, but that has been factored into the purchase price. Obviously, our sales will be increased in 2020 and beyond, so we anticipate having total sales in excess of $4 billion in 2020. While the assets to be acquired are not expected to generate positive adjusted operating income⁽¹⁾  in 2020 after closing, we don’t expect it to be negative either.  We will improve the operations over time, and we believe that we will see good cash flow and earnings from the assets commencing in 2021. On the Capex front, much of the capital expenditures in the Metalsa assets are for program capital. Even with the acquisition, Capex for Martinrea is expected to be generally flat for next year compared to 2019, and we continue to see 2020 to be a good year from a cash flow and free cash flow⁽¹⁾  perspective.”