PERTH, Australia - Synerject, a 50:50 joint venture between Orbital Corp. Ltd. and Siemens VDO Automotive Corp., has signed a letter of intent with BRP US Inc. for the purchase of BRP's engine management modules facility in Delavan, Wis., Orbital reported in a recent statement.
It is expected that the transaction, which comprises the investment in working capital assets, should be finalized by Jan. 31.
The facility to be acquired manufactures fuel injectors and engine management modules for Evinrude and Johnson outboard engines. As part of the transaction, Synerject will continue to supply BRP's Johnson and Evinrude division through long-term supply contracts.
This puts Orbital in a unique position, given that the company also licenses its direct injection technology to Mercury Marine, a BRP competitor, for its OptiMax line of two-stroke outboard engines.
The acquisition will generate a minimum annualized increase in Synerject's turnover of $15 million with significant, identified growth prospects for the future, according to Orbital. The facility will be profitable from the date of acquisition and over the medium term is expected to achieve profit margins consistent with those of Synerject's current business, the company said.
The transaction is a milestone in the implementation of Synerject's strategic growth plan and presents Synerject with a significant diversification opportunity, allowing it to increase both its product offerings and skill base, commented Orbital.
Orbital Chief Executive Officer Rod Houston said, "Clearly this transaction is significant for Synerject and will complement its existing business. From Orbital's perspective, it is a major step in consolidating the turnaround of our business and shareholders will benefit from increased value created in a growing Synerject."
Synerject supplies engine management systems, modules and components for the marine, recreational, motorcycle and industrial markets.
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