Japan’s Teijin Ltd. has agreed to acquire U.S. composites specialist Continental Structural Plastics Holding Corp. for $825 million.
Through the acquisition, Teijin aims to secure North American sales channels for automotive composite products. CSP, which will become a wholly owned subsidiary of Teijin, operates 14 locations globally, 11 of which are located in the United States.
“Through this transaction, Teijin aims to become an automotive solution provider by expanding its offerings beyond carbon fiber and glass fiber materials, in collaboration with other materials manufacturers,” the company said in a statement.
“Teijin intends to expand its product portfolio from materials to component design, implement a global supply chain and help achieve vehicle weight reductions in order to comply with tighter environmental regulations being introduced after 2020.”
CSP supplies lightweight composite materials and molded parts for automotive and other industries, with sales of more than $634 million reported last year. “As a major producer of carbon and aramid fibers as well as thermoplastics, Teijin offers complementary expertise to CSP’s operations in glass fiber- and carbon fiber-reinforced composites and thermosets,” said CSP CEO Frank Macher.
“I think what it affords us is a wide array, perhaps a complete array, of plastic materials solutions and fiber solutions to meet customer needs for everything from decorative application to structural to thermoplastic areas and thermoset areas to meet the needs of our customers,” said Macher. “We have the customer connections here, and of course they have the customer connections over in Asia, so they’ll be able to help us grow in China, and we’ll be able to help them grow here in North America, especially with the auto companies.”
CSP is being sold for 10.25 times its earnings before interest, taxes, depreciation and amortization (EBITDA), Macher said. Teijin is a nearly $8 billion company supplying health care, electronics and safety industries as well as automotive.
Teijin considers CSP’s expertise in composites to be complementary to its own work with thermoplastics.
“We are confident that the platform for automotive composite products business we will gain through the acquisition of CSP’s complementary technical expertise in thermoset composites and GFRP know-how will trigger further development of our integrated high-performance materials business, one of our key strategic fields,” Teijin president Jun Suzuki said in the release.
CSP will be forgoing the potential joint venture with Mitsubishi Rayon Co. it had previously announced was being considered, as Teijin is a direct competitor to MRC in the carbon fiber market.
“We believe that with Teijin we’ll be able to provide customers with the same level of technical support that they would have achieved with Mitsubishi,” Macher said. “It’s just unfortunate that we don’t have laws here that allow bigamy, and we can only marry one of the two.”
Teijin is the fifth-largest producer of carbon fiber in the world, Macher said, compared with Mitsubishi Rayon as third-largest. Teijin has plans to build a carbon fiber facility in the U.S., giving CSP a North American source for that material.
Teijin’s U.S.-based holding company will buy CSP’s shares. The deal is scheduled to be completed in December, pending regulatory approval and other conditions.
CSP, based near Detroit in Auburn Hills, Mich., is not affiliated with German auto supplier Continental AG.