DETROIT - Morgenthaler Partners, a buyout group in Cleveland, on Friday acquired Gates Formed-Fibre Products.
Gates Formed-Fibre is a spin-off from rubber products company Gates Corp., which is a subsidiary of Tomkins PLC.
The acquired company, renamed Formed Fiber Technologies Inc., will be the basis of one of two units - fiber products and metal components - being assembled by Morgenthaler.
Formed Fiber Technologies produces molded, nonwoven carpet used in the trunks and interiors of vehicles. It has estimated annual sales of $100 million. Terms of the deal were not disclosed.
"We believe the time is ripe to build a significant new fiber products supplier," says Fred Festa, 44, a partner at Morgenthaler.
Morgenthaler's strategy is similar to that of former Reagan administration budget chief David Stockman.
Stockman's Heartland Industrial Partners created a metals unit, Metaldyne Corp., and a fabrics and interior parts supplier, Collins & Aikman Corp.
But Collins & Aikman has run through a succession of CEOs in a struggle for profitability. Stockman was named CEO of the company Aug. 11.
Festa said Morgenthaler's units are designed to be smaller and have a narrower focus than those of Heartland. Morgenthaler's metals unit consists of MPI International Inc. of Rochester Hills, Mich., a fine blanking company, and precision stamping company Skill Tool & Die Corp. of Cleveland. They have combined annual sales of more than $100 million.
Festa said Morgenthaler's units each are expected to expand to annual sales of up to $500 million.
Formed Fiber Technologies is the first acquisition for Morgenthaler's fiber group. It is headed by CEO David MacMahon, 59. Customers include the Big 3 and transplant automakers.