Three fast-growing automotive suppliers could be candidates for initial public offerings within two years.
Saturn Electronics & Engineering Inc., Delco Remy America Inc. and the recently created MSX International Inc. could seek initial public stock offerings 'in one to two years,' said Richard Manoogian, chairman of MascoTech Inc. The $1.3 billion automotive metalworking and replacement-parts company has equity interests in the three private companies.
Manoogian's comments suggest some suppliers are preparing to take advantage of the buoyant stock market. Such offerings would provide cash for continued rapid growth of Delco Remy of Anderson, Ind., and Saturn Electronics and MSX, both of Auburn Hills, Mich.
'I would have to agree with Richard Manoogian,' said Ralph Miller, chairman and CEO of MSX. 'It will be earlier than later that we will need additional capital to do all the things we want to do.'
MSX announced last month it would become a $1 billion company with the planned acquisition of units from Geometric Results Inc., a unit of Ford Motor Co. The sale is expected to bolster MSX's role as the world's largest engineering and technical services company focused on the transportation industry.
Delco Remy's director of public relations, John Pyzik, declined to comment.
The $600 million supplier of starter motors for light vehicles and heavy trucks was spun off three years ago by General Motors. Besides its guaranteed contracts with GM, Delco Remy is considered a strong candidate for an initial public offering soon because of its track record as an independent supplier.
Saturn Electronics - much smaller, at $168 million in sales last year - is expanding globally with its electronics and electro-mechanical components. The company has a plant in Mexico, an affiliate in Italy and is a majority partner in a joint venture in China.
CEO Wallace Tsuha Jr. would say only that 'we are exploring alternative financing to continue our growth.'