By David Barkholz, Automotive News
Tory, Michigan-Cadence Innovation llc has agreed to snap up a major piece of Collins & Aikman Corp.'s plastic-trim business as the troubled interiors supplier is dismantled under Chapter 11 bankruptcy protection.
The plastics unit is the largest remaining part of Collins & Aikman being sold. It posted revenue of about $2000 million in 2005. Terms of the deal were not disclosed.
Cadence has agreed to buy nine of the 26 plants in the unit, Collins & Aikman said today. About 3500 employees work at the nine plants.
Collins & Aikman did not disclose which nine plants are involved in the transaction.
Spokesman David Youngman declined to say whether the company's Hermosillo, Mexico, plant was included in the purchase. The plant is the exclusive supplier of full interiors to Ford Motor Co.'s mid-sized sedan platform, sold as the Ford Fusion, Mercury Milan and Lincoln MKZ. It generates about $300 million in sales annually to Ford.
Cadence was created in May 2005 by an investment group led by Harbinger Capital Partners, of New York, and Yucaipa Companies llc, of Los Angeles. The investors bought the former Venture Holdings Co. llc out of Chapter 11 reorganisation.
The Cadence deal is subject to creditor approval and bankruptcy court approval. Until the deal is closed, other companies could buy the business, with Cadence entitled to a cancellation fee if its bid is not accepted. As such, Cadence is deemed the stalking horse for the purchase.
Cerberus Capital Management LP, one of four investment funds said to be pursuing the purchase of the Chrysler group, is the lead bidder to buy Collins & Aikman's soft-trim business. The unit, which makes carpeting and acoustic parts, generated revenue of about $750 million in 2005.
In a story published in Automotive News in February, Cadence ceo Jerry Mosingo said the company was preparing for a growth spurt after a "difficult" 2006.
Cadence, based in Troy, should see sales increase "in the hundreds of millions of dollars" in 2007, up from $650 million last year, Mosingo said.
In May 2006, 14 of bankrupt Collins & Aikman's European automotive interior plants were acquired by International Automotive Components Group llc (IAC), a joint venture between WL Ross $& Co. llc. Franklin Mutual Advisers llc and Lear Corp. Lear later signed a deal with IAC to put most of its European interiors business into the IAC, in return for a 34 percent stake in the JV.
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