Punch International Acquires Wheel Manufacturer BBS

Belgium’s Punch International NV, the diversified industrial holding company headquartered in Sint-Martens-Latem, announced on June 29 that it has taken over BBS, the German developer and producer of lightweight wheels for premium segment sports and passenger cars. BBS is currently listed on the Frankfurt and Stuttgart stock exchanges but was declared bankrupt in May 2007, however the company is now expected to make a positive contribution to the Punch group’s net profit as soon as it the acquisition is finalised.

Punch will take over all the bankrupt company’s assets as of 1 August 2007, subject to the transaction’s approval by the antitrust authority. The acquired assets will include those of BBS Kraftfahrzeugtechnik AG and BBS Motorsport & Engineering GmbH, the brand name BBS and the activities of the company’s plants in Schiltach and Herbolzheim, Germany. The transaction also comprises the takeover of all the shares of the American sales subsidiary BBS of America, Inc and the redemption of all lease contracts in progress. BBS has an extensive portfolio of technology patents, which is also included in the takeover. Funds for the acquisition are drawn from a combination of the proceeds of the private placement dated 7 June 2007 and a bank loan. The activities taken over will continue under the name BBS International GmbH and become integrated in the Punch Motive division of the Punch group.

According to Punch, a number of disadvantageous strategic choices led to the German company’s bankruptcy. BBS decided in particular to expand its field of action from the profitable premium segment for exclusive vehicles to the medium-sized vehicles characterised by high volumes but low margins. The opening of establishments in Italy and China, and the accompanying start-up problems, caused considerable losses. Punch state that in future it intends to again focus solely on the profitable premium segment, and it expects BBS to make a turnover contribution of at least 60 million euros during the 2007 financial year.

BBS was founded in 1970 and grew to become one of the world’s leading producers of high-quality lightweight wheels for sports and passenger cars. The company supplies nearly all major OEMs, race teams, the replacement market and tuning companies. Brands such as Audi, BMW, DaimlerChrysler, Ferrari, Jaguar, Land Rover, Maserati, Porsche, Saab, Volvo and Volkswagen have been customers for years. BBS wheels have earned numerous places of honour in the F1 constructor championships.

The company particularly made its name with a series of successful innovations, the first of which, the three-piece race wheel, dates from 1972. With its most recent innovation, ‘Air Inside Technology’, for which it holds worldwide patents, BBS has pioneered the production of lightweight wheels. These wheels have continuous hollow chambers and hollow-cast spokes that make them considerably lighter and thus substantially reduce fuel consumption.

Guido Dumarey, CEO of Punch, says: “We are very satisfied because this acquisition is of great strategic importance. Punch has expanded its clientele to include large OEMs, and a new milestone is on the way with the construction of a hybrid car. In the CVT of Punch Powertrain, we already have the most suitable transmission while BBS’s patented air-inside-technology wheels are ideally suited for in-wheel electric motors which, because they save weight and space, are in turn ideal for integration in a hybrid vehicle. What Xeikon was and still is in the graphics sector, is BBS in the automotive business; an innovation-driven player, continually developing innovative products and techniques for a carefully chosen niche market.”