Martinrea International Inc.
TSX : MRE

Martinrea International Inc.

April 20, 2009 09:40 ET

Martinrea International Inc. Acquires Assets of SKD Group

TORONTO, ONTARIO--(Marketwire - April 20, 2009) - Martinrea International Inc. (TSX:MRE), a leader in the production of quality metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector, announced today the completion of several asset purchases from the SKD Group. SKD Company is a metal forming company, with Canadian plants in Mississauga, Milton and Brampton. It is currently operating under CCAA protection. Martinrea acquired, in three separate transactions pursuant to a court-approved sale process, certain equipment and inventory from SKD, each related to a different customer, namely, Honda, Ford and Chrysler. The Honda and Ford related equipment purchases were completed on April 3, 2009, and the Chrysler related equipment purchase was completed on April 16. Martinrea will move the equipment to its facilities in Canada and the United States and will perform work for those customers from those plants. The total purchase price for the equipment over the three transactions was approximately $3 million. Martinrea did not purchase any land or buildings, and will not operate any former SKD facilities in Canada. Although volumes in the automotive industry are currently down, in 2008 the revenue generated from the assets purchased was over $125 million on an annualized basis.

Martinrea previously announced the purchase of an SKD plant near Mexico City and an SKD plant in Jonesville, Michigan for an aggregate purchase price of approximately US$10 million, including the land, buildings and all the equipment. The Jonesville facility is approximately 450,000 square feet, and is Martinrea's first stamping facility in Michigan. A portion of the work previously done by SKD's plants in Canada is being moved to the Jonesville facility, increasing capacity utilization and throughput. The Mexico City facility is the Company's first metal forming facility in the Mexico City area. Annualized revenues of these two plants were approximately $100 million in 2008. In Jonesville, the largest customers are Honda, Ford and Chrysler, and in Mexico customers include General Motors, Chrysler and Volkswagen.

Fred Jaekel, Martinrea's Chief Executive Officer, stated: "We are very pleased with the addition of these assets and the business from our customers, and we thank them for supporting us. Any takeover business we are awarded requires customer support and we appreciate the confidence our customers are showing in us. The industry is going through a very difficult time, with volumes so much lower, but there are tremendous opportunities for suppliers who can assist customers also in being able to absorb takeover business without any production disruptions. We have taken advantage of these opportunities in the past, and we see more of this in the future as the supply base continues to consolidate. We are particularly pleased with our new plants in Mexico City and Jonesville, two locations which are important for us as we establish a presence closer to key customer facilities. The Canadian acquisitions will allow us to increase throughput at our existing facilities, including Jonesville, which improves capacity utilization and profitability at those plants. We are very pleased to add significant Honda business to our revenue base, as well as increase our Ford, Chrysler, GM and Volkswagen business. Finally, we believe the pricing was very good for the assets purchased and the volume of business received."

The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol "MRE".

This press release may contain forward-looking statements within the meaning of applicable Canadian Securities laws including statements relating to: capacity utilization, continuous improvement, and rationalization of operating facilities; automotive industry outlook and future vehicle production; asset transfers and sales, future restructuring efforts, acquisition opportunities; new business awards; automotive industry consolidation; and the Company's pursuit of its business strategies. The words "expect", "anticipate", "estimate", "may", "will", "should", "intend", "believe", "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Many factors could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the those risks and uncertainties as set out under the heading "Risks and Uncertainties" in the Company's Management's Discussion and Analysis for the fiscal year ended December 31, 2008 and those risks and uncertainties as set forth in the Company's Annual Information Form and other public filings which can be found at www.sedar.com. Actual results may differ materially from those currently anticipated. Except as required by law, the Company has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking statements.

Contact Information

  • Martinrea International Inc.
    Nick Orlando
    President and Chief Financial Officer
    (416) 749-0314
    (905) 264-2937 (FAX)