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June 01, 2018 02:00 AM

Cooper Standard acquisition expands presence in Asia

Chris Sweeney
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    Keith Stephenson

    NOVI, Mich.—Cooper Standard Automotive Inc. continues to be active in the Asia-Pacific region.

    The firm just acquired 80.1 percent of LS Mtron Ltd.'s automotive parts business. The South Korea-based firm produces jounce brake lines and charge air cooling technology, which complements its current fuel and brake delivery systems and automotive fluid transfer product lines.

    Financial details were not disclosed. In addition to South Korea, LS Mtron operates an automotive parts joint venture in China and a plant in Brazil, both of which will be part of the transaction.

    "It's consistent with our strategy to aggressively grow our business in Asia," said Keith Stephenson, Cooper Standard's chief operating officer. "It's strategically important to us also because it expands our addressable market for our core products within our fuel and brake business and our fluid transfer/premium hose business. And it also partners us with a company that we have a very high view on, the LS Group."

    It's easy to see why Cooper Standard would want to partner with the LS Group, which will retain a 19.9 percent ownership stake of the automotive parts unit. That unit employs 100 and accounted for $90 million of LS Mtron's $1 billion in sales. LS Mtron, and its nearly 1,700 employees, is part of a larger conglomerate with $25 billion in sales. LS Mtron's other products include offerings for the wire and cable industry, which Stephenson said could open up other partnerships between the firms down the road.

    "We feel really good about the partner, we love their core products and it aligns with our strategy to grow both organically and inorganically in the Asian market," he said.

    "As we develop the relationship, it's our hope that we'll be able to develop additional opportunities with them. This is a large, sophisticated, well-run business that we think will be a good partner for this company and may present additional opportunities down the road as well."

    As for the immediate impact, Stephenson said the deal will significantly enhance Cooper Standard's brake product portfolio. LS Mtron's jounce brake lines, made from synthetic rubber, connects the brake line to the caliper. With Cooper Standard already producing the brake line, the combined firm now can offer a complete system to original equipment manufacturers.

    The firm's second core product line is charged air cooling technology, which is the crux of its plastics injection molding business. Stephenson said as internal combustion engine decrease in size, OEMs are trying to maintain power by adding turbochargers, which creates more opportunities for charged air cooling technology.

    Other benefits include global cross-selling opportunities in North America and Europe, and enhanced relationships with new OEM customers, specifically Hyundai, which Stephenson said LS Mtron has a strong partnership with and is currently one of Cooper Standard's smaller customers.

    "Our intention is to globalize these products," Stephenson said. "That would be true for both North America and Europe. Every vehicle in the world has jounce lines connected to brake lines, so this is a global opportunity. Our first focus will be getting this right in (South) Korea, China and Brazil, but we absolutely intend to make this part of our global product portfolio."

    Stephenson added that Cooper Standard's material science also may be able to improve some of LS Mtron's current products.

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