Visteon looks primed for a deal
Tim Leuliette: Significant Asian experience
Visteon Corp.'s transformation from a Ford parts supplier to most likely an Asian company took another twist last week.
Visteon said Don Stebbins, 54, was out as CEO, replaced on an interim basis by former Dura Automotive CEO and current Visteon board member Tim Leuliette, 62.
The shake-up is happening amid rumors that Korean supplier Mando Corp. may try to acquire Visteon's lucrative climate control business. The rumors helped fuel a rally in Visteon stock.
In July, Visteon offered $805 million to acquire the remaining 30 percent stake in its Korean joint venture, Halla Climate Control Corp. But that deal was nixed after the country's National Pension Service rejected the offer.
This month, Visteon lowered its annual sales forecast, citing currency and declining vehicle production in Europe and other regions. Sales this year will be $6.6 billion to $6.8 billion, vs. a May forecast of $6.6 to $7 billion.
Leuliette has significant experience in the Asian market, including his China-centric investment firm Andus-Leuliette. A year ago, China Auto Parts and Accessories Capital Holding Ltd., of Hong Kong, acquired a minority stake in Andus-Leuliette previously held by Tempo Group Inc., a Beijing auto supplier.
Leuliette was hired to lead supplier Dura Systems in 2008 after it emerged from bankruptcy and led its sale to a New York private investment firm, Patriarch Partners, in 2010.
As Stebbins walked out the door, effective Aug. 10, the Visteon board immediately added two new board members: former EaglePicher CEO David Treadwell and Francis Scricco, senior vice president of manufacturing, logistics and procurement for Avaya Inc. until his retirement in October 2008.
Treadwell has deal-making experience. He led EaglePicher out of bankruptcy in 2006 as COO and pared several of its divisions upon becoming CEO later that year.
Speculation is already spreading that with Mando on the hunt, Visteon could be primed for a deal.
If Mando makes an offer for the climate business and the Visteon board decides to sell, Visteon will be left with a near $2 billion-a-year interiors business after it terminated an agreement to sell the remainder of its interiors business to its China joint venture Yanfeng Visteon Automotive Trim Systems Co. The company originally announced the deal last November.
It's unclear what would then happen with the interiors business, but it may leave an open window for competitors such as Johnson Controls Inc., Magna International Inc. or Lear Corp. Johnson Controls offered $1.25 billion to acquire Visteon out of bankruptcy in May 2010, but the deal was immediately rejected by Visteon management.
Visteon sold its lighting unit to India's Varroc Group for $92 million this year.
The company reported second-quarter net income of $75 million, after two consecutive quarterly losses. Visteon has been plagued by unprofitability since Ford Motor Co. spun off the supplier in 2000. Visteon reported net income of $1 billion in 2010 after shedding $1.2 billion in debt through Chapter 11.
Stebbins fell on his sword trying to hold Visteon together. Only time will tell if Leuliette and his team are determined to dissolve the supplier through a set of deals.
Until then, Korea's Mando remains on the prowl.