News Room 2016
UACJ To Acquire Membership Interests in U.S. Manufacturer and Seller of Automotive Aluminum Structural Materials and Various Aluminum Components
March 22, 2016
UACJ Corporation (Headquarters: Chiyoda-ku, Tokyo; President and CEO: Mitsuru Okada) and SRS International Holdings, Inc. (Headquarters: Michigan, United States; President and CEO: Yogen Rahangdale) have agreed to the acquisition by UACJ of all membership interests in SRS Industries, LLC (Headquarters: Michigan, United States; CEO: Yogen Rahangdale; hereinafter, “SRS”) for US$155 million on cash and debt free basis. SRS, a subsidiary of SRS International Holdings, manufactures and sells automotive aluminum structural materials and various aluminum components under the brand of “Whitehall Industries”, primarily in the United States and Mexico.
Automakers looking to expand their operations in the U.S. market are using aluminum to reduce vehicle weight in order to meet the fuel economy levels called for under U.S. Corporate Average Fuel Economy (“CAFE”) standards. In addition, automaker in the U.S. are already promoting the full-fledged use of aluminum in their principal models, and demand for automotive aluminum materials is forecasted to rise substantially—not only for Automotive Body Sheet, but also for structural materials and various other components. Furthermore, this trend is expected to spread from the United States across the world.
With regard to Automotive Body Sheet, on March 10, 2016 UACJ announced that it had signed a Memorandum of Understanding to expand its joint venture with Constellium N.V. to produce Automotive Body Sheet in the U.S.
UACJ aims to establish a firm base from which to proactively promote sales of these products to its customers in automotive aluminum structural materials and various aluminum components, by acquiring SRS, a leading company in North America.
In addition, through the collaboration of its Group companies, UACJ aims to provide optimal solutions in aluminum automotive materials and expand its global supply structure. As a result, UACJ aims to augment its value as a company by earning the trust of its customers and continuing to achieve its growth targets.
Overview of the Company to Be Acquired
| New company name | UACJ Automotive Whitehall Industries, Inc. |
|---|---|
| Representative | To be decided |
| Location | 5175 W. Sixth Street, Ludington, MI, USA |
| Business | Manufacture of automotive aluminum structural materials and various aluminum components for U.S., Japanese and European OEMs, Tier 1 and Tier 2 of automotive industry in the United States and Mexico |
| Corporate capital | US$2 million |
| Founded | February 14, 1974 |
| Established | November 18, 2009 |
| Current principal members and ownership ratios | SRS International Holdings, Inc. : 88.0% Rani Rahangdale 2015 Grantor Retained Annuity Trust No.1 : 12.0% |
| Consolidated net sales | US$117,357,000 (year ended December 31, 2015) (Unaudited) |
| Production bases | Extrusion/processing plant (headquarters function): Ludington, Michigan, United States Processing plant: Ludington, Michigan, United States Extrusion/processing plant: Paducah, Kentucky, United States Processing plant: San Miguel de Allende, Guanajuato, Mexico |
| Employees | Approximately 800 |
We expect the transaction to close in April or May 2016 after receipt of approval from the U.S. antitrust authorities and following satisfaction of certain terms of the membership interest purchase agreement. This acquisition will not affect UACJ's consolidated financial results for the fiscal year ending March 31, 2016.