|
Textron sells auto unit
|
 |
August 7, 2001: 11:34 a.m. ET
Collins & Aikman pays $1.24B for auto trim unit of Cessna Aircraft owner
|
NEW YORK (CNNfn) - Textron Inc. agreed Tuesday to sell its largest auto parts division to rival Collins & Aikman Corp. for stock and cash valued at $1.24 billion as part of the conglomerate's effort to shift out of the volatile automobile industry.
Under terms of the deal, Collins & Aikman will pay $1 billion cash, including the assumption of debt, as well as stock valued at $245 million in C&A Products and 18 million shares of Collins & Aikman's common stock.
Providence, R.I.-based Textron (TXT: up $1.85 to $56.85, Research, Estimates), which owns Cessna Aircraft Co. and Bell Helicopter, began talking with potential suitors for its Textron Automotive Trim unit earlier this year. The division logged $1.8 billion in revenue last year, about 14 percent of Textron's total revenue of $13 billion.
"At the end of last year, we set a new course for Textron, committing to reduce our role in the automotive sector and redefine our portfolio," Chairman and CEO Lewis Campbell said.
Textron also said it plans to buy back 12 million of its shares, partly financed by $800 million it expects from the sale of the auto parts unit and the sale of its smaller turbine engine components units.
Collins & Aikman (CKC: down $0.20 to $8.00, Research, Estimates), which makes interior fabrics, acoustic systems and other auto parts, is attracted to the Textron unit because the purchase will expand its line of interior auto panels and plastic moldings.
Collins & Aikman Chairman and CEO Thomas Evans explained why he sought the Textron unit in an interview on CNNfn's Market Call. [491K WAV] or [492K AIFF]
The acquisition is part of a broader restructuring of the company under Chicago investment group Heartland Industrial Partners LP, which owns 60 percent of Collins & Aikman. After investing $125 million in the company earlier this year, Heartland announced expansion plans and acquired another auto parts supplier, Becker Group LLC, for more than $140 million in cash and stock. 
|
|
|
|
|
 |
|
