BorgWarner to Acquire Charging Business of Hubei Surpass Sun Electric (SSE)
BorgWarner (NYSE: BWA) announced on September 20, 2022, its agreement to acquire the Electric Vehicle Solution, Smart Grid, and Smart Energy businesses of Hubei Surpass Sun Electric (SSE) for an enterprise value of up to RMB 410 million. This acquisition supports BorgWarner's global expansion in the DC Fast Charging market, enhancing its operational footprint in China alongside existing capabilities in Europe and North America. The deal, expected to close in Q1 2023, could include contingent payments up to RMB 143 million.
- Acquisition supports global expansion in the DC Fast Charging market.
- Enhances existing European and North American charging footprint with a presence in China.
- Projected SSE revenues for 2022 expected to be approximately RMB 180 million.
- Transaction subject to shareholder approval, introducing potential delays.
- Risks associated with integration of SSE's operations.
- Supports continued expansion in DC Fast Charging Market
- Complements existing BorgWarner European and North American charging footprint by adding China presence
- Leverages BorgWarner's global capabilities across quality, engineering, supply chain, manufacturing, and sales
- Closing expected in first quarter 2023
AUBURN HILLS, Mich., Sept. 20, 2022 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) and Hubei Surpass Sun Electric (SSE) today announced that they have entered into an Equity Transfer Agreement under which BorgWarner has agreed to acquire the Electric Vehicle Solution, Smart Grid and Smart Energy businesses of SSE. The transaction has an enterprise value of up to RMB 410 million, of which approximately RMB 267 million would be delivered at or soon after closing. Up to RMB 143 million could be paid in the form of contingent payments over approximately two years following the closing.
Headquartered in Xiangyang, Hubei province, China, SSE's electrification business supplies patented electric vehicle charging solutions to customers in China and more than 70 other countries. SSE has delivered over 50,000 charging points and has led the engineering, procurement, and construction (EPC) of more than 250 charging station sites. SSE's charging and electrification capabilities in China are expected to complement BorgWarner's existing capabilities in Europe and North America. SSE's 2022 revenues for the electrification business are expected to be approximately RMB 180 million.
The transaction is subject to satisfaction of customary closing conditions and SSE shareholder approval. The closing is expected in first quarter 2023.
"This transaction makes good business sense as we continue to bolster our fast-charging capabilities globally," said Frédéric Lissalde, President and CEO of BorgWarner. "SSE will bring enhanced offerings while supporting Charging Forward, our strategy to accelerate our growth in electrification. We look forward to welcoming their talented team to BorgWarner."
For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility — to help build a cleaner, healthier, safer future for all.
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You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: supply disruptions impacting us or our customers, such as the current shortage of semiconductor chips that has impacted original equipment manufacturer ("OEM") customers and their suppliers, including us; commodities availability and pricing; competitive challenges from existing and new competitors including OEM customers; the challenges associated with rapidly-changing technologies, particularly as relates to electric vehicles, and our ability to innovate in response; uncertainties regarding the extent and duration of impacts of matters associated with the COVID-19 pandemic, including additional production disruptions; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential disruptions in the global economy caused by Russia's invasion of Ukraine; failure to realize the expected benefits of this or other acquisitions on a timely basis; the failure to promptly and effectively integrate this or other acquired businesses; the ability to identify targets and consummate acquisitions on acceptable terms; the potential for unknown or inestimable liabilities relating to the acquired businesses; the uncertainty of the global economic environment and potential for recessionary conditions in regional economies; and the other risks noted in reports that we file with the Securities and Exchange Commission, including Item 1A, "Risk Factors" in our most recently-filed Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this press release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.
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