Teleflex to Sell Global Automotive Biz

2007-10-15 Manufacturing News

Teleflex signs agreement to sell its business unit that designs and manufactures automotive and industrial driver controls, motion systems and fluid handling systems.

Kongsberg Automotive Holding (KOA), Kongsberg, Norway, developer, manufacturer and marketer of systems for gearshift, clutch actuation, seat comfort, stabilising rods, couplings and components, has agreed to purchase the automotive business unit of Teleflex for $560 million in cash. The automotive business units consist of the design and manufacturing of automotive and industrial driver controls, motion systems and fluid handling systems.

The annual revenues of these Teleflex units are approximately $855 million. The business units to be divested are Teleflex Automotive, Teleflex Industrial and Teleflex Fluid Systems, which are all part of the Teleflex Commercial Segment. These businesses employ globally over 8,000 people in 34 manufacturing sites.

Stated Jeffrey P. Black, chairman and chief executive officer, "We are very pleased to be transitioning these businesses to a well respected industry leader that serves similar customers with a single focus on technologies for the global automotive and industrial markets. Kongsberg recognized that these businesses have strong management teams, a well-established customer base and a manufacturing footprint that can strengthen their global market position and core product areas."

The remaining Commercial business units of Teleflex will provide marine driver controls and related products, power and vehicle management systems and rigging services to a range of commercial markets.

As recently as two weeks ago, Teleflex completed the acquisition of Arrow International expanding their Medical Segment to become the largest part of the company's revenues and operating profits. Teleflex Incorporated (NYSE: TFX) designs, manufactures and distributes quality-engineered products and services for the medical, commercial, and aerospace markets worldwide, providing innovative solutions for customers around the world.

Added Black, "These two transactions create an overall Teleflex portfolio of businesses positioned to deliver improved overall operating margins, reduced cyclicality and significant prospects for future growth." The company intends to use the net proceeds to pay down debt.

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