LUXEMBOURG and TOKYO – Shareholders of TMD Friction Group SA, a leading manufacturer of friction materials for automotive and industrial applications, have reached agreement with Nisshinbo Holdings Inc. (NISH), a Japanese group listed on the Tokyo Stock Exchange, on the terms of a recommended acquisition of the company.
Management from TMD says the company has grown rapidly over the past three years, benefitting from strong growth in fast-growing regions such as China, Brazil and the independent aftermarket. The company says it is now well-positioned, having made significant investment in capacity and product development as well as through targeted acquisitions. For the year ended Dec. 31, 2010, TMD reported a 20 percent increase in sales to €637 million, with proforma EBITDA up 160 percent to €71 million.
NISH has an established position as a global player in the areas of brake, mechatronics, textiles and electronics. NISH’s brake business is operated globally by Nisshinbo Brake Inc. (NISB) and its overseas subsidiaries, which include manufacturing facilities in Japan, South Korea, the U.S., China, Thailand and India.
The two companies say combining TMD with NISB will create one of the world’s largest automotive brake friction manufacturers, with clear technology leadership and an extensive offering for passenger cars and commercial vehicles. The combined companies will have revenues of more than €1.0 billion and more than 6,000 employees.
Once the transaction is complete, NISH will continue to operate TMD as an independent, wholly owned subsidiary. TMD will continue to be led by Derek Whitworth, CEO, with his management team. Koji Nishihara, president of NISB and a NISH board member, will also join the board of TMD. A joint global management team also will be established with members from NISB and TMD.
Whitworth commented, “I am delighted to be joining the Nisshinbo group of companies. This is a great opportunity for TMD to continue our development with a strong and successful partner. Their expertise, particularly in the markets where we are growing fastest, will be invaluable as we seek to accelerate our expansion and continue to provide innovative and leading products to our customers. I would also like to thank Pamplona Capital Partners II, LP for helping us at a particularly challenging time in the early part of 2009. They have been a hugely supportive shareholder and partner for our management team.”
Koji Nishihara, president of NISB and a NISH board member, added, “TMD is a leading global brake friction manufacturer with strong brand recognition and established technology leadership dating back 100 years. The combination of NISB and TMD under the ownership of NISH creates the largest, most capable, global automotive brake friction manufacturer in the world.
“Together, we will have a strong presence in all major automotive sectors with an extensive global customer base and minimal geographic overlap. We see several opportunities to leverage our combined technology, geographic knowledge and customer networks. I look forward to working with Derek and his team in the years ahead.”
