Crain News Service
After 70 years in the auto parts business, Excel Industries Inc. plans to sell out to a smaller company, Dura Automotive Systems Inc.
Excel, based in Elkhart, Ind., makes a range of auto parts at its 30 plants. The company is a global leader - considered in the top two worldwide - in the production of plastic window assemblies.
Excel also is a large producer of injection molded parts, including trim and taillight assemblies and door handles.
Dura will assess all of Excel's product lines before deciding whether it will shed some of them, said Dura CEO Karl Storrie.
'To get the critical mass we needed, we've had to look outside our core businesses,' said Storrie, who is based at Dura's Rochester Hills, Mich., automotive office. 'Some of our products, particularly window regulators, fit in very well with Excel. But we need to look at all of it.'
Dura, based in Minneapolis, devotes much of its operations to cable-related systems and driver-control mechanisms.
The company expects to lower costs at Excel plants by as much as $6 million in 1999 and $20 million next year, Storrie said.
Dura will buy Excel under a cash/stock purchase option agreement. Based on the current share price, Dura will pay Excel stockholders about $332.8 million. In addition, Dura will assume about $153.7 million in Excel's debt, for a total price of about $486.5 million.
The sale is also about critical mass, said Excel's investor relations spokesman, William Schall. As more engineering and program-management costs are shifted from carmakers to suppliers, it became more difficult for Excel to compete, Schall said.
Excel expects to record about $1.1 billion in sales during 1998, he said.
Excel got its start in 1928 making window curtains for early cars. It went public in 1984.
Dura recorded sales of $449.1 million in fiscal 1997. It ranked No. 98 on the Automotive News list of top original equipment suppliers to North America. Excel ranked 39th.
Together with new Dura contracts and recent acquisitions, the merged company plans to exceed $2 billion in sales in 1999, Storrie said.
Dura is owned by Hidden Creek Industries Inc., an umbrella management company based in Minneapolis. The company aggressively has acquired other suppliers over the past two years.
Excel's single largest product, window assemblies, accounts for nearly $370 million of its sales.