Automotive suppliers Harvard Industries Inc. and Breed Technologies Inc. have agreed to merge as part of a $600 million plan to lift Breed from Chapter 11 bankruptcy, the companies announced Tuesday.
The new company, which has yet to be named, will present Breed’s creditors with $200 million in cash, $20 million in notes, 40 percent of stock in the merged company, and 5 percent of stock options at a set price that has not been determined.
Harvard is seeking $325 million from CIT Group and Citibank, N.A. to finance the deal.
Harvard Chairman and CEO Roger Pollazzi will be the CEO of the new company.
The transaction is subject to goverment, shareholder and other approvals. In addition, Breed must obtain bankruptcy court approval, which it expects to receive in the second half of 2000.
Harvard is headquartered in Lebanon, N.J., and produces rubber seals, castings, stamped products and manifolds. Breed, based in Lakeland, Fla., produces airbags, seatbelts, steering wheels and electronics.
Breed was 42nd in the Automotive News’ most recent ranking of the largest suppliers to North America, with $1.49 billion in original equipment parts sales in 1999. Harvard ranked 114 with $318 million in sales.
Harvard was under Chapter 11 bankruptcy protection from May 1997 to November 1998 before the company reorganized under Pollazzi’s leadership.
Breed has been operating under bankruptcy protection since September 1999. After Breed bought AlliedSignal‘s automotive safety restraint division for $710 million in 1997, the division’s earnings fell short of expectations. Breed filed Chapter 11 when it could not repay the debt incurred
