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Joyson And PAG Fund KSS To Acquire Air-Bag Maker Takata In Asset Deal

The newly merged company will be branded Joyson Safety Systems, and will be based in Michigan.

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A consortium led by its parent Ningbo Joyson Electronic Corp. (Joyson Electronics) and PAG, an Asia-based private equity firm and Future Industry Investment Fund (SDIC), provided the funding to Key Safety Systems (KSS) to successfully complete the acquisition of substantially all of the global assets of Japan-based Takata Corp., out of cross-border bankruptcies in the United States and Japan. Takata’s liabilities associated with the recall of phase-stabilized ammonium nitrate (PSAN) airbag inflators and other liabilities were not acquired by KSS. KSS, headquartered in Michigan, USA, is a global provider of mobility safety.

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The combined company will be rebranded Joyson Safety Systems and will be headquartered in Auburn Hills, Michigan.

“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 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 a global leader in mobility safety, generating annual sales of about $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 $1.588 billion transaction was funded using a combination of equity and debt. Ningbo Joyson Electronic Corp. 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 more than $20 billion in capital. The portfolio companies of PAG Asia Capital, PAG’s buyout arm, includes such global brands as Cushman & Wakefield and Lexmark International.

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“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.”

President Yuxin Tang added, “Our new visual identity represents Joyson Safety Systems optimistically advancing forward in a dynamic world. The elements of the circular logo symbolize the global unification of KSS, Takata and our parent company Joyson Electronics, while the bold and modern design reflects our confident and positive view of the future.”

The purchase agreement announced on Nov. 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.

Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel, KPMG served as financial advisor, and Jefferies LLC acted as lead financial advisor to KSS.

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Nagashima Ohno & Tsunematsu, Weil Gotshal & Manges LLP, and Freshfields Bruckhaus Deringer LLP served as legal counsel to Takata. PricewaterhouseCoopers served as financial advisor, and Lazard served as investment banker to Takata.

Paul Weiss Rifkind Wharton & Garrison LLP served as legal counsel to PAG.

 

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