Exco Technologies Ltd. buying Automotive Leather Company Group Ltd. in cash, stock deal
TORONTO—Exco Technologies Ltd. says it has bought a South Africa-based automotive leather supplier in a cash and stock deal worth roughly $25-million.
According to Exco, it has signed an agreement to purchase Automotive Leather Company Group Ltd. (ALC), a major supplier of leather interior trim to BMW and other German automakers.
Under the terms of the deal, a wholly-owned subsidiary of Exco will pay $17.2-million cash and 973,895 shares of Exco for all outstanding shares of ALC.
Exco said the cash portion of the deal will be funded through operating credit.
ALC had revenue of approximately $78- and $86-million in 2011 and 2012, respectively, according to Exco.
In 2013, ALC sales are expected to be approximately $100-million and are projected to grow over the next several years to approximately $140-million as a new seat cover program for the family of Mini models launch over the next 16 months.
ALC specializes in the manufacture and export of luxury leather interior trim components to the middle and luxury automotive sector.
The company’s primary customer is BMW.
Launched in 1990, ALC acquired a large portion of the South African trim business of BMW in 2002.
In addition to ALC’s production site in the Rosslyn Automotive Supply Park in South Africa, it opened a second production site near Sofia, Bulgaria, in 2011, and is currently establishing another production site in the Kingdom of Lesotho, a landlocked country surrounded by South Africa.
Taken together these production sites employ approximately 2,000 employees.
ALC also has a customer service and technical centre in Germany with approximately 25 staff.
According to Exco, “several shareholders” that are part of the acquisition will continue to manage the ALC business.
The deal is expected to close in the second quarter of the 2014 fiscal year.