Shentou Capital Assists Grammer With Public Takeover Offer From Jifeng

On 29th May, Grammer AG (Grammer) announced the signing of a comprehensive Business Combination Agreement with affiliated companies of Ningbo Jifeng (“Jifeng”), under which Jifeng will make a voluntary public takeover offer for all outstanding shares of Grammer. The total consideration of 61.25 Euro per share (or US$ 889 million in total valuation) represents a premium of 19.4% over the closing price on the previous day, and also a premium of 11.7% over the average price targets of German stock market analysts on the previous day. The takeover offer enables Jifeng to become the controlling shareholder of Grammer by holding 50% plus one shares.
This represents the final stage in the contention of Grammer’s equity over the past two and half years, during which Shentou Capital (Shentou), acting as its M&A adviser in China, has advised and accompanied Grammer, facilitating its final cooperation with Jifeng. Despite all the difficulties for Jifeng to acquire Grammer, Shentou had helped the employees and management team of Grammer to defeat the hostile takeover from the Hastor family by introducing, for the first time in Germany, a Chinese “White Knight” – Jifeng as a new shareholder through subscription of 9% additional Grammer shares. Afterwards with the support from the shareholders, labor unions and the communities, Grammer successfully rejected the attempt by the Hastor family to replace the whole management team and takeover Grammer. Eventually Shentou assisted Grammer to sign a comprehensive strategic cooperation agreement with Jifeng and Jifeng increased its shares of Grammer to become the largest shareholder (25%). Shentou then worked hard with Grammer’s management team, supervisory board and labour union to reach agreements with Jifeng on a host of acquisition issues, culminating in Jifeng’s launch of this comprehensive takeover offer.
As promised by Jifeng in the Business Combination Agreement:
· No change will be made regarding the headquarters and production sites of Grammer;
· Commitment to the current employees will continue;
· The guarantee regarding jobs, customers and suppliers will remain valid for up to 7.5 years, and
· Further investments will be made at Grammer for revenue growth and research development
Based on the above-mentioned agreements, the management team, the supervisory board and the labor union are all supporting the comprehensive offer from Jifeng and ready to work for the growth of Grammer as they have always been.
Shentou has also successfully assisted Grammer in the acquisition of TMD (Toledo Molding & Die Inc.) in the United States from 2017 to 2018.

About Grammer AG

Located in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspension driver and passenger seats for on-road and off-road vehicles. In the Automotive Division, Grammer supplies headrests, armrests, center console systems and high-quality interior components and operating systems to premium automakers and automotive system suppliers. The Commercial Vehicle Division comprises seats for truck and off-road seat segments (tractors, construction machinery, and forklifts) as well as train and bus seats. With 13,000 employees, Grammer operates in 19 countries around the world. Grammer shares are listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra. Its 2017 revenue was approximately 1.8 billion Euros.

About TMD

Toledo Molding & Die Inc. (“TMD”), based in Toledo, Ohio, United States, is one of the leading specialists in the development and production of innovative thermoplastic interior components in the North American automotive market. TMD Group generated revenues of more than USD 300 million in 2017 and has approximately 1,600 employees at 11 facilities in the United States and Mexico.

About Ningbo Jifeng Co, Ltd.

Ningbo Jifeng Auto Parts Co., Ltd., established in 2003, is a leading manufacturer of seat system components for passenger vehicles in China. The company specializes in the development, production and sale of automotive headrest and armrest. The product portfolio includes headrest, headrest rod and armrest. Ningbo Jifeng Auto Parts Co., Ltd. is listed in the Shanghai Stock Exchange from 2nd March 2015.

Reports of the transaction in the Chinese and foreign media

Bloomberg reported the details of the deal
Reuter reported the offer immediately
Handelsblatt News am Abend reported the takeover offer in detail

According to the report from Handelsblatt, Jifeng as the “White knight” helped the management team of Grammer to defend the hostile takeover from Hastor family. Through the newly announced offer the shareholder’s structure will be further stabilized and the advantage of Grammer will be strengthened in the conflicts with the Hastor family.

Handelsblatt has an interview with Jimin Wang – Board Member of Ningbo Jifeng

Jimin Wang (son of Yiping Wang – Chairman of the Board) expressed in an interview by Handelsblatt that a solid trust has been built between Jifeng and Grammer based on the existing cooperation. The strong synergies between the two companies will boost the development of Grammer. He also guarantees the jobs of current employees.

Manager Magazin reported the deal
Caixin Global reported the takeover offer