India’s Amtek Auto Ltd. reached an agreement to acquire Neumayer Tekfor Group, a producer of automotive forgings headquartered in Germany and with nine plants and service centers in Brazil, India, Italy, Mexico, and the U.S. Its Tekfor Inc. operation in Wooster, OH, is a hot-forging plant producing precision automotive parts. The German company had sought creditor protection late last year, and was reviewing options for restructuring or reorganization.
The two companies have arrived at a purchase agreement that will be effective by the end of May, and includes all assets, patents, and real estate holdings, according to a statement by Neumayer Tekfor.
The financial terms will not be revealed until the takeover is completed, according to Arvind Dham, Amtek Group chairman.
"Five months after initiating protective shield proceedings, we have already achieved our key objectives,” according to two officials speaking for Neumayer Tekfor.
“Besides maintaining the group and individual sites, we have also ensured the best possible creditor satisfaction. This transaction is not only better for the creditors than any of the other restructuring options on the table, it is also the best solution for all concerned," stated restructuring expert Joachim Exner and Dr. Jan Markus Plathner, a court-appointed custodian.
The buyer explained that Tekfor is “highly complementary to Amtek Auto’s existing business and the group will benefit from global customer-related synergies.” As examples, Amtek Auto listed Tekfor customers that include Volkswagen Group, Fiat, SKF, BMW, Daimler and Ford.
“It also provides Amtek Auto with access to high-end technology processes, including Hatebur and warm and cold forging technology,” according to the buyer’s statement. Neumayer Tekfor operates several Hatebur precision hot-forming lines that produce automotive parts, like bevel gears.
Besides forging, Neumayer Tekfor operations offer engineering and design, heat-treating and surface treatment, specialty machining, and assembly services. Among its machining operations is a joint venture in India, Amtek Tekfor Automotive Ltd.
Tekfor emphasized that all of its locations would remain in operation, and more than 1,600 employees would be retained.
Wider markets for Indian auto parts producer
Amtek has three forging plants in India, including Ahmednagar Forging Ltd. Its products include forged camshafts, connecting rods, crankshafts, crown wheels, hubs and shafts, as well as fasteners for cars and trucks. Amtek Auto also produces ferrous and nonferrous automotive castings and high-pressure aluminum diecastings at foundries in India and the U.K. It has numerous specialty machining operations for automotive parts in India, Germany, and the U.K.
The Amtek Group reported sales of $1.3 billion for 2012. Adding the Neumayer Tekfor operations will establish it as one of the largest global forging and machining organizations, with consolidated sales totaling more than $2 billion.
In Amtek Auto’s current structure, India accounts for 87% of its revenues and foreign markets represent 13%. After the acquisition of Tekfor, according to its statement, the Indian market will represent 55% of its revenues and the rest of the world will account for 45%.
“As a leading forging and integrated machining company, Tekfor’s extensive high-technology product range includes high-precision camshafts, valve train components, connecting rods, and specialized safety fasteners,” Amtek’ stated.
Commenting on the acquisition, Mr. John Flintham, Senior Managing Director of Amtek Group said:
“We are delighted to announce the acquisition of Tekfor, one of the world’s leading global forging and integrated machining companies,” stated Amtek Group senior managing director John Flintham. “The strategy of combining our manufacturing platforms, complementary capabilities and global reach is overwhelming. Our continued commitment to customer service both operationally and technically will be greatly enhanced by this acquisition.”