DETROIT -- Buyout group Morgenthaler Partners is expected to announce today, Aug. 23, its third auto industry acquisition in 18 months.
The purchase of Precision Gear Co. of Twinsburg, Ohio, is expected to create an auto parts maker with annual sales of at least $200 million.
The new supplier is named Precision Parts International LLC. The company combines Precision Gear and Morgenthaler Partners' previous acquisitions of MPI International Inc. of Rochester Hills, Mich., and Skill Tool & Die Corp. of Cleveland. Terms of the acquisition were not disclosed.
"We will grow Precision Parts from $200 million to north of $500 million," says Michael Bryant, 42, CEO of Precision Parts in Rochester Hills, Mich.
Bryant, a former Lear Corp. vice president, wants to create a large, one-stop auto parts maker to gain the size and scale for industry clout. But he is is keeping 40 percent of his business in aerospace.
Precision Gear manufactures aviation gearing, but Bryant plans to use the division to target automotive business.
Morgenthaler Partners of Cleveland began its acquisition drive with the March 2003 buyout of MPI International. Two months later it acquired Skill Tool & Die.
The combined companies supply gears, stampings and stamped parts for engines, transmissions, brakes and automotive seating. Bryant says he plans to expand into automotive subsystems and systems. He says a planned fourth acquisition will round out his company's product offerings. He declined to provide details.
Morgenthaler, with $2 billion under management, is following a familiar course for financial buyers of auto parts makers. They raise money from high net worth people to fund acquisitions. Then industry veterans are hired to run the companies.
Precision Parts employs 1,100. Its largest customer is DaimlerChrysler AG.