Visteon to acquire automotive electronics business of Johnson Controls

VAN BUREN TOWNSHIP, USA: In a move that will create one of the world's three largest suppliers of vehicle cockpit electronics, Visteon Corp. has agreed to purchase the automotive electronics business of Johnson Controls in a cash transaction valued at $265 million, subject to adjustment.

The acquisition is subject to certain regulatory and other consents and approvals and is expected to be completed in the second quarter of 2014.

The acquisition will enhance Visteon's competitive position in the fast-growing vehicle cockpit electronics segment by strengthening its global scale, manufacturing and engineering footprint, product portfolio and customer penetration. The combined business will be a $3 billion global electronics enterprise with a No. 2 global position in driver information and above-average growth rates for the segment, supplying nine of the world's 10 largest vehicle manufacturers.

In the fiscal year ended Sept. 30, 2013, the business to be acquired by Visteon generated approximately $1.3 billion in revenue and about $58 million in EBITDA (earnings before interest, taxes, depreciation and amortization).

This EBITDA includes a deduction of approximately $12 million for corporate allocations that will not transfer with the transaction. Visteon will assess the necessary addition of resources at its corporate center to support this operation. The transaction offers opportunities for long-term margin expansion through economies of scale, with estimated annual cost synergies reaching more than $40 million by 2017. The transaction will not impact the company's previously announced $1 billion share repurchase program, for which $875 million remains authorized.

Visteon president and CEO Timothy D. Leuliette said the transaction re-inforces Visteon's commitment to cockpit electronics as one of Visteon's two core businesses, along with Halla Visteon Climate Control, the world's No. 2 automotive climate control supplier.