Johnson Acquires German Seat Maker - Analyst Blog

Johnson Controls Inc. (JCI) signed a purchase agreement to acquire C. Rob. Hammerstein Group (“CRH”), a Solingen, Germany-based manufacturer and global supplier of metal seat structures and mechanisms. CRH has operations in nine countries and has 3,600 employees across the world.

CRH's product portfolio includes front seat structures, seat tracks, height adjusters, multi-way adjusters and power gearboxes as well as special applications such as steering column adjusters.

The acquisition will help Johnson Controls to serve a completely different set of customers compared to ones it has been serving so far. It will facilitate growth particularly in China, Mexico, Turkey, Hungary and Romania.

Johnson Controls will integrate CRH business into its metal and mechanisms unit that is a part of its seating components group within the Automotive Experience business. The acquisition will be completed by the end of January 2011.

Johnson Controls Inc. is a supplier of automotive interiors, batteries, and other control equipment. In the fourth quarter of its fiscal 2010, the Zacks #3 Rank (Hold) company reported a 21% increase in profit to $409 million (excluding non-recurring items) from $339 million (excluding non-recurring items) in the same quarter of previous year.

On earnings per share basis, the company's profits increased to 60 cents from 52 cents in the prior year and the Zacks Consensus Estimate of 57 cents. Net sales in the quarter rose 15% to $9.04 billion, higher than the Zacks Consensus Estimate of $8.72 billion. For the full fiscal year, sales increased 20% to $34.3 billion.

The improvement in sales and earnings during the quarter was attributable to higher sales on the back of the company's aggressive expansion in the key geographic markets and an overall recovery in the global automotive markets.