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The eBearing News
September 11, 2006
Asahi Tec Acquires Metaldyne
copyright © 2006 eBearing Inc.
Asahi Tec Corp. (Japan) has signed an agreement to acquire deeply
troubled Metaldyne Inc. (USA) in a deal valued at USD $1.2 billion.
Based in Plymouth, Michigan, Metaldyne manufactures engine, driveline and chassis
components, primarily for North American automakers. In particular, it supplies
rear suspension systems, ball joints, and pumps. The company has 45 plants across
14 countries, employing more than 6,500 people.
Metaldyne is owned by a consortium of private investment banking entities, led by
Heartland Partners and CSFB Private Equity. The company was founded in 2001 via the
Heartland-financed merger of MascoTech Inc., Simpson Industries, Global Metal
Technologies, and Torque Traction Manufacturing.
Making the acquisition, Asahi hopes to push Metaldyne's customer base beyond North America
and into Japan and Asia. Currently, only 7% of Metaldyne sales originate from Asia.
Metaldyne will become an Asahi subsidiary, keeping its Michigan-based
operations intact, while Asahi maintains its Asian operations in Japan, Thailand and China.
Metaldyne has plants in the U.S., Europe, Korea and China.
Asahi, however, is itself no longer an Asian-owned supplier. A 63% majority ownership is held
by U.S. investment firm Ripplewood Holdings LLC.
In the acquisition, Metaldyne shareholders will receive USD $2.18 per share, or $215 million
in a, "cash-out merger". The remainder of the $1.2 billion will
be spent restructuring Metaldyne's large, junk-rated debt load.
In its most recent quarter, Metaldyne sales were flat at $500 million, but the company
reversed profit in 2005 to a $17 million loss in 2006. Overall, Metaldyne sales have
fallen by 20% since it was founded in 2001. It lost $262 million last year on sales
of just over $2.3 billion.
A sign of just how weakened Metaldyne had become: by sales and operations, Metaldyne is
four times larger than Asahi, which employs just 3,500. Yet until Asahi came along, Metaldyne's
future was cloudy, its considerable debt load languishing seven levels below investment grade.
Metaldyne CEO, Timothy Leuliette, said: "After the transaction, both companies will be well
positioned to benefit from growth in
emerging markets in Asia as well as the success of transplants in North America and Europe."
Despite the company's poor performance, Metaldyne executives will reportedly all stay on and assume
senior positions at Asahi Tec.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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