KSS acquires Takata through funds from Joyson and PAG

A consortium led by its parent Ningbo Joyson Electronic corporation (Joyson Electronics) and PAG Asia capital, an Asia based private equity firm and Future industry investment fund (SDIC) provided the funding to Key safety systems (KSS) to successfully complete the acquisition of substantially all of the global assets of Japan-based Takata corporation (Takata), a leading global supplier of vehicle safety systems.

The deal had been announced back in June 2017, after the Japan-based Takata, which manufactures seatbelts, airbags and child seats, filed for bankruptcy protection in the USA and its home market. The company has been involved in the automotive industry’s largest global recall as a result of defective airbags. Faulty inflators in some airbags have been linked to 17 deaths globally as a result of expanding extremely fast and spraying metal shrapnel.

The combined company will be rebranded as 'Joyson Safety Systems' and will be headquartered in Auburn Hills, Michigan, USA. 

Takata’s liabilities associated with the recall of phase-stabilized ammonium nitrate (PSAN) airbag inflators and other liabilities were not acquired by KSS. KSS, headquartered in Michigan, USA, is known for its offerings in mobility safety.

“Joyson safety systems integrates the world-class assets and worldwide operations of KSS and Takata under one common organization and one shared mission of providing the best quality safety solutions to our customers,” said Jeff Wang, Executive Chairman, Joyson Safety Systems.

Joyson safety systems operates in 25 countries with more than 50,000 employees providing life-saving technologies to both automotive and non-automotive markets.
For the merger, the $1.588 billion (Rs 10,385 crore) transaction was funded using a combination of equity and debt. Ningbo Joyson electronic corporation is the company’s majority equity holder. PAG Asia Capital, the lead international private equity partner in the transaction, is the second-largest shareholder and will actively support the integration of Joyson safety systems. Future Industry Investment Fund also provided equity to support the transaction.

PAG is a leading private equity firm based in Asia and manages over $20 billion (Rs 130,790 crore) in capital. The portfolio companies of PAG Asia Capital includes some global brands based in the United States, such as Cushman & Wakefield and Lexmark International.

Weijian Shan, Chairman and CEO of PAG said, “The combination of KSS and Takata creates a best-in-class business with strong growth potential. We’re committed to working with Joyson safety systems to build an industry-leading company.”

Commenting on the company’s new corporate branding, President Yuxin Tang added: “Our new visual identity (referring to the logo) represents that Joyson safety systems is optimistically advancing forward in a dynamic world.“

The purchase agreement finalised on November 21, 2017, was subject to a number of closing conditions, all of which have now been met, including antitrust clearance and bankruptcy court approvals in multiple countries. KSS has now successfully acquired substantially all of Takata’s assets, except for certain assets related to the manufacturing and sale of phase-stabilized ammonium nitrate (PSAN) airbag inflators.