Leoni AG sells Automotive Cable Solutions Business Group
Leoni AG (Nuremberg, Germany) describes the planned sale of its automotive standard and special cables business, bundled in the Automotive Cable Solutions (BG AM) business group, to Stark Corporation Public Company Limited, based in Bangkok, Thailand, as “another important step on the road to sustainable financial stabilization”.
BG AM is one of the market leaders in automotive standard, special and charging cables and has a broad and product portfolio. The operating unit is very well and profitably positioned globally, Leoni states. As a long-standing supplier to the international automotive industry, BG AM has a global production network with 10 locations in 7 countries and around 3,300 employees.
“With this decision, we are strengthening our balance sheet, supporting the ongoing refinancing discussions and further advancing our well-known strategic focus on the wiring systems business,” said Leoni CEO Aldo Kamper.
Stark Corporation is one of Southeast Asia’s leading wire and cable suppliers across industries, with roots dating back to 1968. Chanin Yensudchai, Chairman of Stark Corporation, said: “BG AM’s portfolio, markets and technological know-how complement our strengths perfectly. Together with our new colleagues, we are ideally positioned to play a strong role in the international automotive cable business and to further develop the business worldwide.”
BG AM has a formative history within Leoni AG. A high priority in the selection of the investor was therefore that the new owner is willing and able to strategically develop the products and services and makes a clear commitment to the employees.
The activities sold generated a sales volume of around EUR 1.3 billion in fiscal 2021 and are valued at an enterprise value of EUR 560 million. The expected cash inflow after deduction of financial liabilities and pension charges, among other things, is well over EUR 400 million and will also have a correspondingly positive impact on reported free cash flow.
The closing of the sale is subject to various legal and financial closing conditions, in particular the transaction is related to the structuring of the refinancing concept, which is currently not yet finalized. The Management Board and the Supervisory Board of Leoni AG as well as the Board of the buyer have already approved the planned sale.