Ningbo Joyson Electronics Corp. will acquire Key Safety Systems Inc. (Photo : YouTube)
Public Chinese auto conglomerate Ningbo Joyson Electronics Corp. will acquire Key Safety Systems Inc., based in Sterling Heights, in a $920-million deal.
The deal announced on Tuesday, Feb. 2, will lead to a combined supplier generating income of about $3 billion globally, according to Crain's Detroit. The agreement will close in the first half of the year pending regulatory endorsements.
The manufacturer of automotive safety parts like seatbelts and airbags, Key Safety will run an independent subsidiary headquartered in Sterling Heights. It is reported that CEO Jason Luo will still lead the firm under Joyson.
Key Safety employs 12,000 people globally, including 300 in Michigan. Through an email to Crain's, Luo said that the agreement represents the efforts by the management to become a public corporation.
Luo said: "(Key Safety) management's long-term vision has been to transition (Key Safety) into a public company. The access to public funding and increased flexibility to our balance sheet helps further accelerate our growth plans. The merger with Joyson is the best route to achieve that vision because in addition to the public capital, (Key Safety) immediately gains scale . . ."
The deal will pay current investors, including Hong Kong-based private equity company FountainVest Partners, New York-based Crestview Partners, Canada Pension Plan Investment Board, and Key Safety Management, China Automotive News reported.
FountainVest was Key Safety's major shareholder in Aug. 2014 in a $800-million deal.
In 2015, Key Safety became the beneficiary of airbag production shifts after the largest worldwide airbag recall in industry history by Takata Corp.
Key Safety unveiled in May 2015 that it would increase production of both frontal and side airbag inflators at firms in Florida and China by over 5 million units per year.
The firm generated about $1.4 billion in business with automakers worldwide in 2014, a surge of about $1.2 billion from 2013.
The chair and founder of Joyson, Jeff Wang, said in a statement: "I have always been intrigued by the safety market and the underlying technology that provides the opportunity to save lives. (Key Safety) has emerged as an industry leader well recognized for its strong global management, innovative technology, high-quality worldwide manufacturing presence and diverse customer base."
