Dana Divests European Hydraulics Business To HPI Group To Streamline Portfolio

Dana Incorporated DAN said on Wednesday that it is planning to sell its European hydraulics business to HPI Group, a hydraulics business jointly held by Apogee Group and EiM Capital.

The deal encompasses operations in Italy, France, and Germany, manufacturing industrial components like hydraulic motors, pumps, valves, and power packs. 

“The sale of our European hydraulics production facilities allows us to focus on industrial system sales while having access to a broader portfolio through a supply agreement,” said Jeroen Decleer, senior vice president and president, Dana Off-Highway Drive and Motion Systems.

Last year, this unit generated about $90 million in sales to external clients. The development is a part of an ongoing evaluation of its operations and product portfolio, the company said in a press release.

The transaction is expected to be completed in the first half of 2024, subject to regulatory approvals and customary closing conditions.

On February 20, the company reported fourth-quarter sales of $2.494 billion, missing the street view of $2.585 billion.

Fourth-quarter sales were lower than $2.555 billion in the year-ago period owing to the impact of the UAW strike on the Light Vehicle Driveline segment, which was partially offset by cost-recovery actions and conversion of the sales backlog.

Dana expects FY24 sales of $10.65 billion-$11.15 billion, diluted earnings per share of $0.35-$0.85, and adjusted EBITDA Of $875 million-$975 million.

Regarding the latest deal with HPI Group, Decleer added, “We look forward to continuing our relationship with HPI by selling and supplying hydraulic components through Dana’s global network of service and assembly centers around the globe.”

Price Action: DAN shares closed lower by 7.84% to $12.46 on Tuesday.