Key Safety Systems completes acquisition of airbag supplier Takata for US$ 1.58 billion
Michigan-based Key Safety Systems (KSS) today announced that a consortium led by its parent Ningbo Joyson Electronic Corporation (Joyson Electronics), PAG, an Asia based private equity firm, and Future Industry Investment Fund (SDIC) provided the funding to successfully complete the acquisition of substantially all of the global assets of Japan-based Takata Corporation (Takata), a leading global supplier of vehicle safety systems including seat belts, airbags, steering wheels and child seats as well as other automotive products, out of cross-border bankruptcies in the United States and Japan.
Takata has been under fire over a defective air-bag scandal that has resulted in 50 million airbags being recalled in the U.S. alone. The defective airbags have been linked to at least 22 deaths and hundreds of injuries. Takata’s liabilities associated with the recall of phase-stabilized ammonium nitrate (PSAN) airbag inflators and other liabilities were not acquired by KSS.
The combined company will be rebranded as Joyson Safety Systems, headquartered in Auburn Hills, Michigan, USA.
In Mexico, Takata owns six plants located in the cities of Monclova, Torreon, Acuna, Agua Prieta and two facilities in Monterrey, where it also operates a Technical Center. In Monclova alone, the company employs 5,000 workers.
KSS owns five plants in Mexico, four located in Valle Hermoso, Tamaulipas and one more in Ciudad Juarez, Chihuahua.
“Joyson Safety Systems integrates the world-class assets and worldwide operations of KSS and Takata under one common organization and one shared mission to provide the best quality safety solutions to our customers,” said Mr. Jeff Wang, Executive Chairman, Joyson Safety Systems. “We are excited about the opportunities created through this combination, and we are committed to providing safety solutions of the highest quality and reliability to drive the next generations of mobility.”
Joyson Safety Systems is poised to be a global leader in mobility safety, generating annual sales of about US$ 7 billion. The company operates in 25 countries with more than 50,000 employees providing life-saving technologies to both automotive and non-automotive markets.
The US$ 1.58 billion transaction was funded using a combination of equity and debt. Ningbo Joyson Electronic Corporation is the company’s majority equity holder. PAG Asia Capital, the lead international private equity partner in the transaction, is the second-largest shareholder and will actively support the integration of Joyson Safety Systems. Future Industry Investment Fund also provided equity to support the transaction.
PAG is a leading private equity firm based in Asia and manages over US$ 20 billion in capital. The portfolio companies of PAG Asia Capital, PAG’s buyout arm, include some of the best global brands based in the United States, such as Cushman & Wakefield and Lexmark International.
“PAG has a long track record of working with our partners to build successful companies,” said Weijian Shan, Chairman and CEO of PAG. “The combination of KSS and Takata creates a best-in-class business with strong growth potential. We’re committed to working with Joyson Safety Systems to build an industry-leading company.”
The purchase agreement announced on November 21, 2017 was subject to a number of closing conditions, all of which have now been met, including antitrust clearance and bankruptcy court approvals in multiple countries. KSS has now successfully acquired substantially all of Takata’s assets, except for certain assets related to the manufacturing and sale of phase-stabilized ammonium nitrate (PSAN) airbag inflators.