Ningbo Joyson, a Chinese producer of industrial and automotive electronics equipment, has signed a definitive deal to acquire US-based airbag maker Key Safety Systems, KSS. As per the terms of the pact, Joyson will purchase the outstanding shares of Key Safety for a value at about US$920 million, which is payable in cash.
The transaction has been approved by the companies' Board of Directors. Joyson said that the acquisition, which is expected to end in the first six-month of 2016, is subject to regular closing conditions, regulatory approvals and filings.
Joyson noted that the US air bag maker will operate as a separate group firm and maintain its Michigan headquarters. In addition, present CEO Mr Jason Luo will continue to lead Key Safety Systems. According to KSS shareholders, Joyson is a strategic investor which will enable KSS to reach new heights. KSS shareholders include the Canada Pension Plan Investment Board, Crestview Partners and funds managed by FountainVest.
Jason Luo said that KSS is very much pleased to team with Joyson. Partnership with Crestview and FountainVest has widened the air maker's addressable market and enabled it to achieve best-in-sector 20 percent revenue CAGR. KSS hope that the merger with Joyson will further accelerate its business and fasten its future growth. KSS will remain committed to its customers and aim to better serve their requirements, Jason Luo added.
According to Jeff Wang, Founder and Chairman of Joyson, the acquisition of KSS mark its entry into the automotive safety market and offers the chance to save lives. "This is well aligned with the Joyson strategy of being a trusted global partner to the world's best automakers while earning respect as a high growth company," Jeff Wang added.
Bloomberg said that KSS competes with its rival Takata to provide steering wheels and seat belts and also improving its independent driving technology like parking systems and collision avoidance. KSS has been widening its production of inflators and air bags following Takata's recall of defective air bags.
In an email statement to CRAIN'S DETROIT BUSINESS, Jason Luo said that the agreement represents KSS' efforts to become a public firm. Key Safety was created in 2003 when Carlyle Group purchased bankrupt assets of Breed Technologies.
Recently, Ningbo Joyson and its subsidiary Preh Holding took over 50 percent of the TechniSat Automotive unit from TechniSat Digital GmbH. Joyson said that TechniSat Automotive will be operated in the Automotive Electronics unit along with Preh Gmbh. The take-over deal is subject to approvals by authorities. The parties have agreed not to reveal details of the deal. Joyson said that the net value of both the transaction reaches US$1.1 billion.
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