Dura Automotive Systems Inc. has agreed to buy Trident Automotive plc, laying the groundwork to become one of the world's largest independent suppliers of vehicle cable systems.
While Dura wants Trident's complementary cable business, the fate of Trident's large but noncable-related plant is in doubt. The firm has a 1 million-square-foot injection molding plant in Kentwood, Mich., that makes polycarbonate lighting systems and nylon exterior door handles.
Dura, which makes cable control systems using both plastic processes and metal stampings, purchased Wixom, Mich.-based Trident for $87.5 million in cash. The merger agreement, signed April 7, also includes the assumption of Trident's outstanding debt.
The sale is scheduled to close by mid-May, Karl Storrie, Dura chief executive officer, said in a telephone interview from the firm's Rochester Hills, Mich., operations office. Dura's corporate headquarters is in Minneapolis.
The deal will fold Trident's vehicle cable products and related mechanisms — such as parking brakes, transmission shifters, latches and foot pedals — into Dura's own cable-related parts. The result fits Dura's grand design to fatten its sales rapidly while becoming No. 1 or No. 2 in its core cable business, Storrie said.
``We have an ambitious growth strategy to reach global markets,'' he said. ``By the year 2000, we expect to be a billion-dollar company. The purchase puts us another step closer to that goal.''
The company is well on its way. Trident's $300 million in 1997 sales would raise Dura's sales to about $825 million. In 1991, Dura recorded sales of only $116 million, before it went on an acquisition jaunt.
The 104-year-old Kentwood injection molding plant was owned by Keeler Brass Automotive Inc. before a merger in the 1980s with Trident's former parent, FKI plc of Yorkshire, England. The plant, still informally known as the Keeler Brass facility, operates about 50 injection presses with clamping forces to 2,000 tons.
Storrie said Dura will evaluate the Kentwood operation before making a decision to retain or sell the plant. About 31 percent of Trident's business, or about $93 million in sales, comes from the plant, with the rest generated from cable assemblies.
In other ways, the merger is harmonious, Storrie said. The companies currently operate in some of the same countries, such as Brazil and France. In some of those locations, Dura is stronger in cable production, while Trident is more dominant in related mechanisms, he said.
The sale to Dura comes only five months after Trident's internal management team, led by Chairman J. Richard Jones, wrested the company from publicly held FKI. The group of investors paid $157.5 million in cash to take Trident private and move its headquarters to Wixom. Jones is to remain as Trident chairman.
Trident is a key supplier to Chrysler Corp., Toyota Motor Corp., Renault SA, PSA/Peugeot-Citroen SA and Honda Motor Co. Ltd., Storrie said. The Michigan company operates seven cable manufacturing sites worldwide, making such products as hand brakes, gears and clutch and steering mechanisms.
In addition to extruding PVC to coat wire cable parts, the firm also uses injection molding and thermoforming to produce its shifter knobs, brake pedals and other thermoplastic parts.
Dura has been on an acquisition tear. Since January 1997, Dura has acquired a German manufacturer of shifter and brake cables, a U.S. maker of column-mounted shifter systems and two makers of automotive jacks. Storrie said several other potential purchases are in the works.