SINT-MARTENS-LATEM, Belgium (July 3, 2007) — Punch International N.V., a diversified industrial holding company, has taken over BBS Group, the German custom alloy wheel maker, which was declared bankrupt in May.
Punch did not disclose the purchase price but said BBS should generate sales this year of about $75 million and contribute to earnings as soon as the deal closes, which Punch anticipates will take place Aug. 1, subject to the approval of antitrust authorities.
The deal covers the assets of BBS Kraftfahrzeugtechnik A.G. and BBS Motorsport & Engineering GmbH—including the activities of the plants in Schiltach and Herbolzheim, Germany—the brand name BBS and associated patents and licenses, and control of BBS of America Inc. of Braselton, Ga.
The activities taken over will operate under the name BBS International GmbH and be integrated into the Punch Motive division of the Punch group.
Punch said in a statement that BBS' financial problems were related to its decision to broaden its product range to wheels for “medium-sized vehicles characterized by high volumes but low margins” and the opening of establishments in Italy and China, which resulted in start-up problems that caused considerable losses.
The company said it intends to focus solely on the profitable premium segment again but did not specify what changes it might be considering.
BBS was founded in 1970 and grew into a company recognized for its lightweight wheels for sports and passenger cars. The company supplies a wide array of major vehicle makers, race teams, the replacement market and tuning companies.
Among its original equipment customers are car brands such as Audi, BMW, DaimlerChrysler, Ferrari, Jaguar, Land Rover, Maserati, Porsche, Saab, Volvo and Volkswagen. BBS also is a leading supplier of wheels to Formula 1 teams.
BBS is recognized as the initiator of the three-piece wheel in 1972. More recently it developed what it called “Air Inside Technology,” which allows for the use of continuous hollow chambers and hollow-cast spokes that reduce weight, thus helping reduce fuel consumption.
Punch said it financed the acquisition by a combination of the proceeds from a recent private placement and a bank loan and said the buyout will help it achieve its ambition of building an efficient hybrid car. Last year Punch acquired the continuously variable transmission assets of German auto components supplier ZF Friedrichshafen.
In particular, Punch said BBS' lighter-weight wheels are “ideally suited” for in-wheel electric motors, which are being used more frequently in hybrid vehicles because they save weight and space.
Punch expects its sales to grow to nearly 30 percent next year to $675 million with a full year of BBS revenue contribution.