BEIJING – Chinese automotive supplier Ningbo Huaxiang Electronic Co., Ltd. is acquiring 93.63 percent shares of molder and mold maker Shanghai Global Precision Mould & Plastics Co., Ltd. with ¥650 million ($100.3 million), according to a report from Plastics News China on March 22.
Ningbo Huaxiang holds the goals to reach a net profit of ¥48.3 million in 2016, ¥71.8 million in 2017 and ¥92 million in 2018.
Shanghai Global runs 130 injection molding machines. Its main customers include TE Connectivity Ltd., TRW, Magna International, Rain Bird Corp., Watts Water Technologies Inc., Schneider Electric SE, Marquardt Group, Swiftronic Pte Ltd. and Hilti Corp.
Global makes precision molds and injection molded parts for automotive, irrigation, mobile phone, connector and power tool industries. In the first 10 months of 2015, it produced 467 sets of molds and 224.9 million injection molded parts. In the same period, it generated sales revenue of ¥264.4 million, which is evenly split between export and the Chinese domestic market. Operating profit and net profit reached ¥22.1 million and ¥20.4 million respectively.
Ningbo Huaxiang said it expected its automotive parts manufacturing business to benefit from the strong R&D capabilities of Shanghai Global.
Ningbo Huaxiang is raising cash through private placement to fund the deal.