DETROIT — Automotive seating supplier Adient sold its premium brand, Recaro Automotive Seating, at the start of the year — a move that comes as the company works to bring itself back to profitability.
Recaro is now owned by Raven Acquisition LLC, a privately owned, Detroit-based investment corporation, Recaro said in a statement. Raven is led by a former Recaro executive and TCE Enterprises, a family investment firm with experience in the auto industry, the release said.
The transaction was effective Jan. 1. Terms were not disclosed in the press release issued by Recaro.
“We know strategically we can continue to support and grow to address emerging customer needs in our specialized marketplace,” Recaro President Emil Kreycik said in an email to Automotive News.
Recaro has three locations in Europe, the U.S. and Japan and employs about 425 people. In fiscal 2019, the business generated about $150 million in revenue.
Adient, the world’s largest seating supplier, has struggled financially since it was spun off from Johnson Controls Inc. in October 2016.
Shortly after the spinoff, Adient acquired Recaro, which produces premium and specialty vehicle seats for automakers and the aftermarket.
For its 2019 fiscal year, Adient, based in Plymouth, Mich., reported a net loss of $491 million compared with a loss of $1.7 billion in 2018. Adient CEO Doug DelGrosso has been working to get the company on track and focus on its core business since taking the helm in October 2018, with the goal of bringing the supplier to breakeven this year.
In its quarterly earnings presentation on Friday, Adient confirmed it divested Recaro.
Adient said on Friday that its adjusted earnings before interest, taxes, depreciation and amortization for the quarter ending Dec. 31 improved to $297 million from $176 million in the year-ago period. Revenue was down 5 percent to $3.9 billion. Its net loss widened to $167 million from $17 million, impacted by one-time, noncash charges.
Recaro said the new corporate structure will help it concentrate on its main business of “performance seats, ergonomic seats, and special applications – with shorter and faster decision-making processes allowing greater flexibility to better meet the requirements of the market.”
Working capital and long-term financing are being provided to Recaro by Arctaris, a Boston-based investment firm, the release said.
Adient did not immediately respond to a request for comment.
The company ranks No. 13 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $17.4 billion in 2018.