Company said acquisition will allow it "to be more flexible in an increasingly changing competitive landscape"
MONTREAL—Dorel Industries Inc. said it has closed the US$120-million acquisition of the one of the largest juvenile product manufacturers in China.
According to Dorel, the acquisition of the juvenile products unit of Hong Kong-based Lerado Group (Holding) Co. Ltd. will allow it “to be more flexible in an increasingly changing competitive landscape,” while helping deliver products to market faster and vertically integrate production capabilities.
“This acquisition will improve Dorel Juvenile’s value chain and is a sound investment in our future,” Dorel president and chief executive Martin Schwartz said in a statement.
“Lerado Juvenile will ensure that we continue to further grow our industry leadership and it will augment profitability within the second year of operations.”
First announced in June, the acquisition provides Dorel with its first company-owned factories in Asia, and includes four facilities in China as well as a research and development centre in Taiwan.
All told, the facilities total more than 2.5 million sq.ft. of space.
“These new facilities will complement our existing facilities worldwide and will allow us to best service Dorel’s existing customer base,” Schwartz said. “We also look forward to continuing to supply Lerado Juvenile’s current customers at a service level that they have come to expect.”
The acquisition is also expected to accelerate Dorel’s growth plans in the Asian domestic market, an opportunity which the company said has been under-developed thus far.
“We have had a transition team in place in China since shortly after the transaction was announced in June, headed by a seasoned industry veteran from Asia who now becomes responsible for all operations,” Schwartz said. “The production of several products has already been shifted to Lerado from other suppliers.”