US: Avon Rubber automotive MBO completes soon
The senior management of Avon Rubber's automotive group has agreed to acquire its automotive division.
Backed by Red Diamond Capital, a New York-based private equity firm, the management-led buyout is expected to be completed within three weeks, subject to shareholder approval.
With annual revenue of approximately $US349m (EUR280m, GBP188m), Avon Automotive is a global supplier of low-pressure hoses for air-induction, fuel and coolant systems, as well as vibration-management products.
"As a privately-held company, we hope to accelerate Avon Automotive's global investment in technology, creating value for our automotive customers as well as career opportunities for Avon employees around the world," said Lee Richards, who heads the buyout team and currently serves as president of Avon's automotive division.
Richards noted that Red Diamond Capital has a strong commitment to the automotive industry, adding that he expected Avon Automotive's fundamental business operations and product lines to continue unchanged after the buyout.
"As a private company, Avon Automotive will have the capital resources and strategic flexibility to further strengthen its position in the automotive sector," Richards said. "Avon Rubber's investment priorities were in other sectors."
Richards said that Avon Automotive's management team will remain in charge of the new enterprise and no plant closures are anticipated as a result of the transaction.
Avon Automotive's global headquarters will continue to be in Cadillac, Michigan.
A UK-based company, Avon Rubber plc is headquartered in Melksham, Wiltshire. In a letter to shareholders, Avon Rubber noted that after reviewing the future of the automotive business within the company it had "concluded that the sale of Avon Automotive was in the best interests of shareholders...."
Avon Automotive has around 3,500 employees and operates 12 manufacturing facilities in the US, UK, Mexico, France, Spain, Portugal, the Czech Republic, India and Turkey.