BorgWarner Inc. BWA and Eldor Corporation have signed a Share Purchase Agreement, according to which BorgWarner has agreed to buy Eldor Corporation’s Electric Hybrid System business segment for €75 million at closing. The buyout is expected to complement and consolidate BorgWarner’s electric product portfolio.
Eldor is a leader in the automotive business and a supplier to the main automotive manufacturers across the world. It operates in 20 locations, including Italy, Germany, the USA, China, Turkey, Brazil, Japan and South Korea. Eldor’s EHS segment manufactures components like onboard chargers (OBCs), DC/DC converters and integrated high-voltage boxes. All these components are expected to complement BorgWarner’s existing electric product portfolio.
The acquisition will enhance BorgWarner’s engineering capabilities. With the acquired potential, it can design compact and efficient 400V and 800V onboard chargers that are compatible with the variety of regional grid configurations found globally. It will also add innovative and cost-efficient high-frequency DC/DC converter technology to the portfolio.
The transaction is subject to the satisfaction of closing conditions and is expected to be completed by the third quarter of 2023.
BorgWarner anticipates that Eldor’s EHS division will yield €25 million in revenues throughout the entire year of 2023. With regard to BorgWarner’s Charging Forward 2027 goals, the company foresees revenues reaching approximately €250 million by 2027. Also, BorgWarner’s 2023 electrification revenues are expected to increase to more than $1.5-$1.8 billion, up from $870 million in 2022.
Frédéric Lissalde, president and CEO of BorgWarner, said that Eldor’s technology is a great addition to BorgWarner’s ePropulsion portfolio, specifically because it relates to expanding high-voltage power electronics beyond the inverter.
Zacks Rank & Key Picks
BWA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Some top-ranked players in the auto space are Allison Transmission Holdings, Inc. ALSN, Li Auto Inc. LI and Wabash National WNC, each sporting a Zacks Rank #1.
Allison manufactures fully-automatic transmissions for medium and heavy-duty commercial and heavy-tactical U.S. defense vehicles. The Zacks Consensus Estimates for ALSN’s 2023 sales and earnings imply year-over-year growth of 7.5% and 19.5%, respectively.
Li Auto designs, develops, manufactures, and sells premium smart electric SUVs. The Zacks Consensus Estimates for LI’s 2023 sales and earnings indicate year-over-year growth of 131% and 2,400%, respectively.
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings indicates year-over-year growth of 12% and 90.7%, respectively.
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