Continental, an international automotive supplier, tire manufacturer and industrial partner headquartered in Hanover, Germany, has announced an agreement with The Carlyle Group, Washington D.C., to acquire Veyance Technologies Inc., Fairlawn, Ohio, for approximately 1.9 billion USD.
While Veyance is well known in the automotive aftermarket as the supplier of Goodyear brand belts and hoses, the company operates globally in the field of rubber and plastics technology and in 2013 recorded sales of approximately 2.0 billion USD, around 90 percent of which are from outside the automotive industry. Veyance has 27 plants around the world and a workforce of about 9,000 employees at the end of 2013. The acquisition is subject to the approval of the responsible anti-trust authorities.
“Veyance’s business and geographic presence complements Continental’s existing global footprint, and the planned integration of Veyance into our ContiTech division will expand our position in rubber and plastics technologies on a worldwide basis. Furthermore this acquisition will enable Continental to come a step closer to its strategic goal of increasing further our proportion of sales to industrial customers and private end users. ContiTech itself will achieve some 60 percent of its sales outside the automotive OE sector in future,” said Dr. Elmar Degenhart, chairman of Continental’s Executive Board in Hanover. “Veyance will make an immediate positive contribution to the corporation’s profitability once the transaction has been concluded. The acquisition can be financed from cash and available credit lines.”
“Veyance Technologies will complement our ContiTech division in key markets where our presence is limited, particularly in the US and South America. Plants in Mexico, Canada, China, Australia and also South Africa will provide additional opportunities,” explained Heinz-Gerhard Wente, member of the Executive Board of Continental AG and CEO of the ContiTech division. “Veyance and ContiTech complement each other geographically, and ContiTech’s Conveyor Belt Group and Fluid Technology business units in particular will benefit from an enhanced global presence. The Power Transmission Group and Air Spring Systems also will achieve positive results from the merger.”
“We are proud of what the Veyance management team has accomplished and believe the combination of Veyance and Continental will even more effectively meet customers’ needs globally,” added Martin Sumner, managing director of The Carlyle Group. In 2013 ContiTech’s and Veyance’s merged pro forma sales will add-up to approximately 7.4 billion USD, and they employ about 39,000 people worldwide. Veyance Technologies achieves about half of its sales in the U.S. Other important markets are Latin America, Africa, China and further Asian countries. The product focus is on conveyor belts, hoses, power transmission belts and air springs.
“ContiTech and Veyance are a great fit for each other,” says John S. Hamilton, chief executive officer of Veyance Technologies Inc. “In addition to the complementary geographic and product mix, we bring an organization and culture which delivers on our commitments to customers, employees, and our communities. We look forward to becoming valuable members of the ContiTech team to continue building upon our shared culture of innovation and providing value to customers.”