DETROIT - Ralph Reins is back.
The man who headed some of the auto industry's largest parts makers over the past two decades is back in Detroit to assemble his own automotive supplier.
In a $100 million-plus deal last week, Reins acquired four aftermarket companies from MascoTech Inc. Pro forma sales of his newly formed Qualitor Inc., of Southfield, Mich., are expected to exceed $100 million this year. Negotiations to acquire a fifth company are under way, he said.
Qualitor becomes one of the few big suppliers dedicated to selling multiple product lines in the aftermarket. Echlin Automotive, which is part of Dana Corp., is another.
'I've been on some Mission Impossibles in my life,' Reins said. 'This was no slam dunk, but it was far from a Mission Impossible.'
His last impossible mission came during his tenure as president of AlliedSignal Automotive. In late 1994, AlliedSignal Inc. Chairman Lawrence Bossidy ordered him to boost his division's profit margins.
Reins, who previously had run UT Automotive Inc., Mack Truck and ITT Automotive, said he told Bossidy that profit margins of 10 to 12 percent were possible, but not 16 percent.
Shortly after he warned Bossidy, Reins abruptly departed the company, and Bossidy later sold most of his automotive business.
Soon after, Reins found a new job as CEO of Envirotest Systems Corp., a Phoenix-based vehicle emission test service contractor. Most recently, he turned around Toledo, Ohio-based AP Parts International Inc. and negotiated its sale.
Buying MascoTech's aftermarket business was certainly no slam dunk. At least six strong contenders bid for the four MascoTech companies, said Clifton Roesler, managing director of Detroit-based W.Y. Campbell & Co., the investment banking firm advising MascoTech. MascoTech decided last year to divest them because they were not part of its core metal-forming business, which focuses on the original equipment market.
The acquisition makes Qualitor one of the few major players dedicated almost solely to the aftermarket, Roesler said.
The companies are Pylon Manufacturing Inc. in Deerfield Beach, Fla.; BLD Inc. in Holland, Mich.; International Brake Industries Inc. in Lima, Ohio; and Hebco Inc. in Bucyrus, Ohio.
They manufacture a variety of replacement parts, brake components, air hoses and wiper blades. Reins said the highly fragmented replacement parts industry offers growth opportunities through additional acquisitions. He projects company sales at $200 million to $400 million within five years.
Reins has committed $2 million of his own money. He and his nine-member executive team raised 20 percent of the $35 million in equity pledged to the acquisition. The other equity players include MascoTech and Windpoint Partners LLC of Southfield, Mich., a buyout fund. The debt for the purchase was provided by Fleet Capital Inc.'s Detroit office.