DETROIT -- Plastech Engineered Products Inc. may file a bid to buy all or some of the assets of bankrupt Collins & Aikman Corp., according to Crain's Detroit Business, a sister publication of Automotive News.
Plastech, of Dearborn, Mich., is working with the New York City-based investment banker Goldman Sachs & Co. to pursue a Collins & Aikman acquisition, according to a source outside the company familiar with the proposed deal. That source did not want to be named. A second source, more closely involved in the proposed deal, confirmed Plastech planned to make a bid.
Plastech, a maker of interior trim, wiring harnesses and cockpit modules, is owned by Julie Nguyen Brown and is one of the largest minority-owned auto suppliers. It ranked No. 49 on the Automotive News list of top 150 original equipment suppliers to North America, with estimated original equipment sales of $1.0 billion in 2004.
Any deal would have to be approved by U.S. Bankruptcy Judge Steven Rhodes in Detroit. But Plastech's taking over some of Collins & Aikman's work would solve problems for the bankrupt supplier and its automaker customers. It would give Collins & Aikman and its creditors much-needed cash and give automakers a more stable supplier.
David Youngman, director of corporate communications for Collins & Aikman, said the company hasn't accepted any offers to date and is continuing to work on its business plan, due to Rhodes by the end of the month.
Collins & Aikman has parts on nearly every car in North America and is launching some critical new programs, such as Ford Motor Co.'s 2006 Fusion mid-sized sedan. That makes Collins & Aikman too big to fail, but its financial problems make it an expensive problem. Automakers are funding the company in bankruptcy with about $300 million in loans, price relief and other measures.
A quick asset sale would benefit nearly everyone, the source said.
Plastech produces a variety of plastic components. The company is no stranger to big deals. In 2004, Plastech acquired LDM Technologies Inc. for an estimated $290 million, an acquisition that nearly doubled the size of Plastech.
Although Plastech has taken on more debt since the acquisition, Brown has said the company is profitable.
Collins & Aikman, of Troy, Mich., produces interior trim, instrument panels, fabric and automotive acoustics. The company filed for Chapter 11 bankruptcy protection May 17. It ranked No. 11 on the Automotive News list of top 150 original equipment suppliers to North America with original equipment sales of $3.90 billion in 2004.