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Australian Pacifica buys Italian auto brakes maker

MELBOURNE, Aug 1 (Reuters) - Australian auto brakes manufacturer Pacifica Group Ltd agreed on Friday to buy Automotive Products Italia SpA from UK-based private equity investors AP Group Ltd for 37.5 million euros ($42 million).

The Italian brakes maker, with annual sales of about 45 million euros, gives Pacifica a break into the European market in an effort to ease its dependence on sales to U.S. automakers.

AP Brakes, which supplies drum brakes and park brakes to Fiat , Ford and Nissan , has a 22 percent market share in Europe.

Its sales are expected to grow by 10 percent a year over the next three years with contracts to supply Renault , Toyota , Opel , Ford's Land Rover, and other Ford platforms due to begin between 2004 and 2006.

"It's a really good base to get into Europe," said a spokesman for Pacifica.

"We reckon that PBR can put some of its own technologies into there to launch a more aggressive move into Europe," he said, referring to Pacifica's brakes division PBR.

Pacifica shares bounced to a 14-month high of A$4.25 by 11:00 a.m. (0100 GMT), up 2.7 percent on the day and outpacing the broader market.

Pacifica expected the acquisition to boost its earnings per share immediately in 2003 after goodwill amortisation, with AP Brakes forecast to make earnings before interest, tax, depreciation and amortisation of 8 million euros this year.

The Australian group is due to report its first half profit on August 6, which the company expected would be about 10 percent stronger than a year earlier, or close to A$24 million.

Pacifica said it would fund the acquisition through a new European bank debt facility.

($1=0.89 euro)