Standard Motor (SMP) Enriches Product Menu on Stabil Buyout
Standard Motor's (SMP) acquisition of Stabil provides it with access to a diversified group of big-league European commercial and light vehicle OE cus...
Standard Motor Products, Inc. SMP recently announced the full ownership of the capital stock of Stabil Operative Group GmbH.
The company will fund the buyout through cash borrowings under its revolving credit facility. It projects the deal to boost its earnings in 2022. Financial terms of the deal are still under the wraps.
Headquartered on the outskirts of Stuttgart, Germany, Stabil is a manufacturer and distributor of a variety of components including electronic sensors, control units and clamping devices to the European original equipment (OE) market, catering both commercial and light vehicle applications. The company with around 230 employees generates around $25 million worth annual revenues and has facilities in Germany, Hungary and Romania.
Long Island City, NY-based Standard Motor was founded in 1919 and is one of the leading manufacturers, distributors and marketers of premium automotive replacement parts for engine management as well as temperature control systems. It primarily focuses on heavy-duty industrial and the OE market. Moreover, the company enjoys a strong competitive advantage, courtesy of its brand recognition and a sizable customer base.
Management is very optimistic about the latest buyout as Stabil provides the company with access to a diversified group of big-league European commercial and light vehicle OE customers, augments its product portfolio and creates a harmony with its existing operations in Poland.
Through this takeover, Standard Motor anticipates using Stabil’s expertise and enhanced capabilities to its advantage. The deal widens the company’s global manufacturing footprint, providing it with expert engineering talent, a powerful sales organization and an efficient leadership team.
The acquisition perfectly complements Standard Motor’s strategy and vision to enhance its product offerings beyond its core aftermarket business into other related areas. Moreover, the combination of Stabil with Standard Motor’s current business is anticipated to fuel the latter’s growth.
Standard Motor has always been on the lookout for acquiring high-performing profitable companies to drive growth. The company’s Pollak business buyout in 2019 enhanced its growth opportunities in the OE, heavy duty and commercial vehicle markets apart from the aftermarket distribution, product management and service areas.
In March 2021, Standard Motor acquired certain assets and liabilities of the particulate matter sensor business of Stoneridge Inc. The purchased product line provides the company with access to an advanced emissions-control technology used in commercial vehicles. Also, in June, the company bought Trombetta, a worldwide leader in the domain of mechanical and electronic power switching and power management devices, generating about $60 million worth of annual sales.
Standard Motor, peers of which include Dorman Products DORM, Genuine Parts Company GPC and LKQ Corporation LKQ, currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have appreciated 7.1% year to date compared with the industry’s growth 12.4%.
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