DETROIT — Cambridge Industries Inc. is poised to spend $75.5 million to purchase divisions of Eagle-Picher Industries Inc. and Goodyear Tire & Rubber Co. that make automotive parts from sheet molding compound, according to documents filed with Standard & Poor's.
The deals had been rumored, but details had not been confirmed by the companies.
The offering memorandum, made public by S&P, was filed by Cambridge before it issued $100 million in senior subordinated notes to institutional investors. The notes, rated by S&P and due in 2007, will help finance the purchase of the two divisions, said Daniel DiSenso, director of corporate ratings for New York-based S&P.
The document said the Madison Heights, Mich., compression molder is in the process of acquiring Eagle-Picher's plastics division for $32.5 million and Goodyear's engineered composites business for $43 million. The Eagle-Picher operation employs 800; Goodyear's SMC-parts plant in Jackson, Ohio, employs 409.
``They have agreements with the two companies but they haven't closed on them yet,'' DiSenso said. ``They're going through the mechanics of funding the deals first. Part of that is putting the overall financing package in place.''
Cambridge and Eagle-Picher officials chose not to comment on the report. Goodyear spokesman Skip Scherer said the two parties were completing due diligence before finalizing the purchase.
Industry sources said both sales could be completed this month. Settling on financing options could have accounted for any delays, sources said.
The acquisitions would cement Cambridge's position in the SMC automotive market. According to S&P documents, the firm expects to generate about $510 million in sales during 1997, more than twice that of its nearest SMC competitors.
At the same time, the company is hampered with $205.7 million in bank debt from its previous acquisitions, the documents said. The company, which has been on a buying jag, has purchased the plastics businesses of Rockwell International Corp., Gencorp and APX International Inc. since 1994.
The memorandum filed by Cambridge is used to help S&P determine a credit rating. S&P assigned a B-minus rating for the notes and a B-plus corporate credit rating to the company.
Cincinnati-based Eagle-Picher and Goodyear, based in Akron, Ohio, both said in March that they were selling their engineered composites divisions. The companies each stated that, while the divisions were profitable, they wanted to focus their attention on core businesses.
Plastics News also reported in March that Goodyear signed a conditional letter of intent to sell its division, based at its Jackson plant, to Cambridge. Privately held Cambridge has not acknowledged that it would buy the plant.
However, Kevin Alder, Cambridge chief operating officer, said during an interview last month that negotiations with Goodyear were reaching an imminent conclusion. Alder did not provide additional details.
No announcement has been made about the sale of Eagle-Picher's plastics division. Industry experts had speculated that both Cambridge and an Eagle-Picher management team were vying to purchase the division, which includes three plants in the Fort Wayne, Ind., area and a sales and engineering office in Inkster, Mich.
The Eagle-Picher division molds parts from SMC and fiberglass-reinforced polyester at plants in Huntington, Ashley and Grabill, Ind. The division, which recorded 1996 sales of about $80 million, accounts for about one-tenth of the company's combined annual sales.
The division operates 49 compression presses, 23 with clamping forces of 1,000-4,000 tons and the rest with much-smaller tonnages.
Goodyear's 220,000-square-foot plant performs injection and compression molding of fiberglass-reinforced SMC exterior components for Ford Motor Co. and other carmakers.
The plant is undergoing a $13.3 million expansion. Industry sources put annual plant sales at a minimum of $80 million.
Cambridge, which posted about $400 million in sales during 1996, wants to reach the $1 billion sales level fairly quickly, Alder said in a recent interview.He said Cambridge also was considering purchases outside North America.
In March, the company gained its first footing in Europe by starting a 50-50 joint venture with SMC parts supplier Menzolit-Fibron GmbH in Bretten, Germany.
Cambridge has grown from $2.9 million in sales during 1990. Profit this year is expected to be about $69 million, compared with $400,000 in 1990.
