Preferred Plastics Sheet, a major supplier of custom extruded sheet, has its third owner in two years. Echlin Inc., a $2 billion supplier of automotive repair parts, bought the unit as part of a $190 million deal to acquire Preferred Technical Group Inc.
Echlin announced Dec. 20 that it will buy PTG plants in five states and in England. PTG had bought the business two years ago from United Technologies Automotive Inc.
The sheet business is a relatively small part of the deal;most of PTG's sales are generated from coupled rubber hose.
Echlin would not disclose any information about specific plants it had purchased, but a former executive of Preferred Technical Group said PTG was running seven plants - four to make hose and fittings and three to extrude sheet - when it was sold. PTG had spun off two plastic profile extrusion plants in 1994.
Echlin said PTG, based in Rochester Hills, Mich., has annual sales of $250 million. About 75 percent comes from the hose business. PTG buys rubber hose and adds fittings to make hose systems for use in power steering, brake, air conditioning and heating systems.
The hose business obviously complements Echlin's existing operations that make automotive aftermarket products such as brake, clutch and power steering hose assemblies.
Less clear are Echlin's plans in custom sheet extrusion - a new technology for the automotive supplier. The three PTG sheet plants - in Greenville, Ohio, Taylorville, Ill., and Greensboro, Ga. - generate about $60 million in sales a year serving automotive, industrial, marine and consumer products.
Paul Ryder, Echlin director of investor relations, said no immediate changes are planned at the sheet factories.
Echlin, based in Branford, Conn., does some of its own injection molding, but Ryder declined to provide details. Overall, Echlin employs about 24,000 at 80 plants in 15 countries.
Echlin topped $2 billion in sales for the first time in the fiscal year ended Aug. 31. Sales were $2.23 billion, an increase of 14.6 percent from $1.94 billion in 1993, which saw a 9 percent sales gain from 1992. Brake systems accounted for almost half of Echlin's sales. About one-third of sales comes from electrical and fuel systems parts.
Although Echlin is a major player, it only has about 4 percent of the gigantic repair-parts market. According to the company, U.S. vehicle owners spent $120.2 billion in maintenance and repairs in 1994, 75 percent of that on parts.
The company has enjoyed strong gains on profit, after plateauing at between $40 million and $50 million from 1984 through 1991. In 1994, profit was $123.6 million, up 32 percent from $93.5 million in 1993. Sales increased by 54.3 percent in 1992 and 45.6 percent in 1993.
The former Preferred Technical Group profile extrusion business, meanwhile, operates under new ownership. In March, PTG sold its plant in Plainwell, Mich., to executives Joseph Germy and Tracy Tucker. Germy now serves as president and Tucker as chief executive officer at the company, renamed Preferred Plastics.
PTG also sold its profile plant in Mount Airy, N.C., in May. That company has been renamed United Plastics Corp.