In the list of top world billionaires, appears a name Shahid Khan – CEO Flex-N-Gate, a world renowned automotive company. While owning a business of his own, Shahid Khan is in prospects of acquiring another big enterprise. His bumper and headlight maker company is in race with four other suitors for Tokyo-based Takata. If he scores Takata deal, Shahid Khan will be able to expand his business from supplying front-end modules and plastic based parts to higher-margin entities which are a rare commodity.
Tokyo-based Takata, a Japanese airbag manufacturer, was once a leading company in the automotive industrial empire. After several unfortunate incidents of its devices malfunctioning and exploding, killing a minimum of 16 people, stained with a reputation, they are now looking for a buyer. But one setback does not de-value the company entirely. According to Deepesh Rathore, director at Emerging Markets Automotive Advisors, London Takata has:
Technology, long-standing relationships with clients and plays in a field with very few competitors.
These are the qualities of Takata that are inviting the finest companies like Stockholm-based Autoliv Inc., Chinese-owned Key Safety Systems Inc. and Japan’s Daicel Corporation. However, Flex-N-Gate looks more promising than the rest, as described by a management consultant in Mumbai:
They may prefer an established company as a buyer compared with Flex-N-Gate. But considering its global aspirations, Flex-N-Gate can offer better valuations. And in a deal, valuation plays a critical role.
66 years old Shahid Khan was born and raised in Pakistan. In his youth, he flew to America in search of broader prospects. While still studying as an engineering student, he worked at an automotive company Flex-N-Gate. As an employee there, he found an effective and better way of manufacturing seamless bumpers. Soon he left the company and started his own, calling it Bumper Works. It designed and manufactured lightweight seamless bumpers. As expected out of his determination, Bumper works was a success.
Due to his strenuous efforts, he landed the business tycoon General Motors as his first client. Mr. Khan’s success story reached its zenith when his company acquired his former employer Flex-N-Gate. This milestone was followed by a stream of successful clients including Ford, Volkswagen AG, Toyota Motor Corp. and Suzuki Motor Corporation.
Commenting on the success of Mr. Shahid Khan and his diligent personality, founder Lean Enterprise Institute Inc., Womack had to say:
He can walk through a factory and have a real sense of what’s going on, unlike a thousand CEOs I’ve met who’ve never done what some of us would call real work. He’s a driven guy. Not an awful guy but he’s in this to win.
Shahid Khan along with analysts and businessmen from around the world are looking forward to Khan gaining control over Takata. Buying Takata will profit Mr. Khan with a 22% global market share in airbag industry. According to Autoliy forecasts, acquiring Takata will enable Mr. Khan to spread his business from $9.5 billion in 2015 to $10.3 billion by 2018.