TORONTO — Automotive parts producer Noble International Ltd. plans to expand its plastics business by acquiring an injection molding operation now run by Magna International Inc.
Noble announced July 6 an agreement to buy Tiercon Holdings Inc. of Toronto. Tiercon has an agreement to buy a Stoney Creek, Ontario, molding operation Magna acquired this spring when it bought Triam Automotive Inc.
Noble's agreement is contingent on Tiercon buying the former Triam molding facility. The companies hope to conclude the deals by late July.
Noble is a Tier 2 supplier of automotive parts, assemblies and services with headquarters in Bloomfield Hills, Mich. Most of its operations are metal-based but its proprietary glove-box lock mechanism contains some plastic. Its sales are about US$100 million annually, mainly to Tier 1 auto suppliers.
Tiercon has equity in Centrifugal Coaters Inc., an Oakville, Ontario, plastics auto part painting operation. Tiercon President and Chief Executive Officer Fraser Wray said the former Triam molding plant, which mainly molds exterior trim, is one of Centrifugal's customers. Noble also has an agreement to buy Centrifugal. Wray will continue as Tiercon's CEO when the firm becomes a subsidiary of Noble.
Tiercon agreed to team up with Noble to help it collect Tier 2 and 3 companies and expand Tiercon's painting and molding businesses, Wray said in a telephone interview. The firms are responding to consolidation trends within the auto parts industry.
Noble CEO Bob Skandalaris said his firm plans to expand the Stoney Creek operation but the details will be based ``on good business judgment.'' The operation has been expanding and now has 24 injection presses with clamping forces of 80-3,300 tons. Before the Magna acquisition, Triam planned to build a painting facility in Stoney Creek.
Noble noted in a news release that the Stoney Creek business occupies 158,000 square feet of space at two leased facilities. It employs about 255 and had sales of about US$30 million for the year ended Jan. 31. Pretax profit was about US$3.4 million. Its main customers are General Motors Corp., Magna, Lear Seating Inc. and Ford Motor Co. It makes body side moldings, rocker panels, exterior components, interior parts, decorative trim and enclosures. The operation has QS 9000 and ISO 9002 certifications.
Noble agreed to buy Tiercon with preferred stock exchangeable for about 80,000 shares of Noble common stock. Noble stock recently traded on the American Stock Exchange for about US$11 per share. Tiercon agreed to pay Magna about C$46 million (US$31.3 million) for the Stoney Creek business.
Magna officials were unavailable to explain why the Markham, Ontario, auto parts maker decided to sell the Stoney Creek operation. Former Triam laser welding operations and other metals businesses are not included in the Noble and Tiercon deals.