Breed Technologies Inc., the world's fourth largest automotive safety systems supplier, is close to being sold to Carlyle Management Group, said two people familiar with the talks.
The deal, valued at $315 million, could unite a company that emerged from Chapter 11 bankruptcy reorganization in late 2000 with a deep-pocketed investment firm that is expanding its auto supplier holdings.
If the sale of Breed goes through, private equity firms would control two of the industry's four largest safety systems suppliers. Last November, Blackstone Group of New York said it would acquire TRW Automotive from TRW Inc. for $4.73 billion.
Carlyle's offer for Breed includes $230 million in cash and the assumption of $85 million of Breed's debt. That would be a discount from the $520 million Breed was offered in 2000 by former auto parts maker Harvard Industries Inc.
The growth of control by investment firms is bound to raise concern at the Big 3, which have traditionally been uneasy with such deals. Private equity firms acquire struggling companies and provide capital. In return, the new owners seek quick profits from a buy-fix-sell strategy.
Breed CEO John Riess did not return calls concerning the sale. Financier B. Edward Ewing, CEO of Carlyle Management Group of Dallas, declined to comment.
The sale could be completed soon, said people with knowledge of the sale who asked not to be named. But the discussions could fall through at the last minute.
Breed of Lakeland, Fla., ranked No. 53 on the Automotive News list of top 150 original equipment suppliers to North America in 2001. The company posted North American original equipment sales of $755 million in its 2001 fiscal year and global original equipment sales of $1.2 billion.
Breed supplies airbag systems to most of the world's automakers. It also offers a range of steering wheels and interior trim, including shift knobs, park brake handles and armrest covers.
Troubled suppliers have little recourse but to part with their assets at a price the private equity firms are willing to pay. Breed's last public financial statement in 1999 valued its assets at $1.42 billion. Last June, Breed sold its ownership in a Finnish technology company.
Carlyle acquired Key Plastics LLC of Farmington Hills, Mich., in 2001, and last year bought Soo Plastics Inc. of Sault Ste. Marie, Mich. Both were bought out of Chapter 11 to form Key Automotive Group, a company headed by Ewing.
Breed filed for Chapter 11 protection in 1999 after an acquisition spree left it unable to pay its creditors. The company emerged from bankruptcy protection after a consortium of two dozen banks and bondholders agreed to convert their debt to equity.