WARREN, Ohio -- Stoneridge Inc. is selling the assets of its wiring business segment for $65.7 million to Motherson Sumi Systems Ltd., an India-based manufacturer of products for the automotive industry, the company announced Monday. The purchase agreement includes the assumption of certain liabilities.
Stoneridge said the sale is aligned with its strategy to focus on higher value-added technologies and products, would improve the company’s profit margin and provide resources to fund growth initiatives.
The transaction involves approximately 4,700 employees and is expected to close in the third quarter.
Stoneridge's Wiring Business designs and manufactures wiring harness products for the commercial, agricultural and off-highway vehicle markets, and assembles entire instrument panels configured to customer specifications in the commercial vehicle market.
Motherson said it intends to expand its presence in North America through this transaction. Included in the sale are the engineering and administration center based here, manufacturing plants in Portland, Ind.; Chihuahua, Saltillo and Monclova, Mexico.
“With the sale of our wiring business, we can now increase our focus and resources on our other business segments, which are technology-driven with global applications and offer greater opportunities to provide higher value to our shareholders," John C. Corey, president and CEO of Stoneridge, said in a prepared statement. “The transaction is not expected to have a material effect on Stoneridge's net new business over the next five years because most of the company's growth is being driven by products in its control devices, electronics and PST segments."
Stoneridge reported first-quarter sales of $236.4 million compared to $235.7 million for the first quarter of 2013. Net income was $1.5 million, or 5 cents per share, compared to 15 cents per share for the first quarter of 2013. In the earnings release, distributed May 8, Corey noted the company’s electronics and control devices segments performed well while its wiring division “has begun to stabilize.”
SOURCE: Stoneridge Inc.
Published by The Business Journal, Youngstown, Ohio.
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