Textron Automotive Co.'s trim division has bought a British maker of plastic trim parts, helping Textron build a bridge to British carmakers and focus its attention on new technologies.
On Aug. 28, publicly held Textron closed on a deal to buy Midland Industrial Plastics Ltd., one of the largest producers of interior and exterior plastic trim in the United Kingdom.
The company and its 560 employees will be folded into Troy, Mich.-based Textron Automotive's trim operations. Terms of the deal were not disclosed, but analysts estimated the sale price at between $61 million and $72 million.
The purchase of the large supplier could serve as a springboard for Textron's further climb into the European market, said equity analyst Peter Arment of JSA Research Inc. in Newport, R.I.
Midland, which expects to record 1998 sales of $72 million, does business with several mainstay British carmakers, including Leyland and Rover Group, which recently was bought by BMW AG.
Midland is in Stourport-on-Severn, England, near Birmingham. The company's two plants — in Stourport-on-Severn and Elmdon, England — make door panels, instrument panels, plastic-molded seatbacks, rear-window package shelves and trunk liners.
The deal further lessens Textron's dependence on work from Chrysler Corp. The Auburn Hills, Mich., automaker accounted for more than half of Textron Automotive's business several years ago but has been weaned to about 45 percent of sales, Arment said.
``It's a bolt-on acquisition that doesn't add a new leg to the company's products, but builds on its core trim business domestically,'' Arment said. ``They've taken a dive away from being heavily exposed to Chrysler and onto some European [vehicle] platforms.''
By 10:30 a.m. Friday morning, Textron's stock price had risen 50 cents, to $67.81 per share from a closing price Aug. 27 of $67.31. The price did not come close to Textron's monthly high of $74 on Aug. 3.
Midland is heavily involved in polyurethane reaction injection molding, thermoforming and wood-fiber compression molding, said Textron Inc. spokesman Steve Capoccia.
Those processes, especially the use of compressed wood fibers, add products not frequently made by Textron's trim group, Capoccia said.
``It's a product we're not currently supplying,'' Capoccia said. ``Whenever we make an acquisition, we look for new technologies that complement our product lines.''
Wood fiber is used predominantly in Europe as a low-cost, easily recycled substrate material that goes behind plastic door panels and other interior pieces. The material is not used frequently in North America.
Midland makes trim parts at a 145,000-square-foot plant in Stourport-on-Severn and a 78,000-square-foot facility in Elmdon. The company is owned by Gerald Bloom Holdings Ltd. of Stourport-on-Severn. Company officials were unavailable for comment late last week.
Before the purchase, Textron's trim division had about 2,200 employees in Europe but none in England, Capoccia said.
Textron Automotive recorded sales of $2.1 billion last year and ranked first on Plastics News' list of top injection molders in North America with relevant sales of $1.4 million. The company is owned by Textron Inc. of Providence, R.I.
On Aug. 11, Textron announced its intent to sell its Avco Financial Services division to a Dallas company.
The sale would net the company close to $3 billion after taxes, 60 percent of which is earmarked for further acquisitions, Arment said.
``I'd look for them to continue expanding in Europe and Latin America,'' Arment said.