Magna International Inc. (MGA - Analyst Report) has inked an agreement to acquire automotive supplier, BÖCO Group of Companies. The acquisition is expected to close in the third quarter of 2016, subject to regulatory approvals.
Following the acquisition, BÖCO's facilities in Wuppertal, Germany and Tianjin, China will be integrated into Magna Closures, which is an operating unit of Magna International.
Magna International believes that BÖCO will complement its technology, footprint and customers. BÖCO, a supplier of latches, hinges and strikers, has an impressive customer base including the likes of BMW Group, Daimler AG (DDAIF - Snapshot Report) and Audi.
Magna International is undertaking this acquisition to strengthen its product portfolio and enhance its engineering capabilities in key regions. The buyout will also fortify the company’s leadership position in the global closure systems market.
Further, BÖCO's product and processing know-how and engineering strength should create global growth opportunities for Magna International. The company expects notable growth opportunities with German automakers in particular as a result of this deal.
Magna International’s revenues should also get a boost from this buyout, given that BÖCO generates annual sales of over 100 million euros (approximately $112.43 million).
Magna International is expanding its business through acquisitions. In Apr 2016, the company signed an agreement to acquire Telemotive AG, a leading engineering service provider in automotive electronics. After the closure, Telemotive will be integrated into Magna International's vehicle engineering and contract manufacturing operating unit, Magna Steyr.
In Jan 2016, Magna International completed the acquisition of GETRAG Group of Companies – one of the world's leading independent suppliers of automotive transmissions.
Magna International currently carries a Zacks Rank #2 (Buy).
Some better-ranked auto stocks include Cooper-Standard Holdings Inc. (CPS - Snapshot Report) and Standard Motor Products Inc. (SMP - Analyst Report) .
Cooper-Standard has witnessed positive estimate revisions in the last 60 days. It also posted positive earnings surprises in the last four quarters, resulting in an average beat of 51.17%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Standard Motor Products, a Zacks Rank #1 stock, has witnessed positive estimate revisions in the last 60 days. The company has a long-term expected EPS growth rate of 15%, which is better than the industry average of 12.3%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>