Concentric plc is selling its automotive plastics molding businesses to Key Plastics Inc. of Novi, Mich., for about £5.68 million ($9.48 million).
Key Plastics (UK) Ltd. of Coventry, England, is taking over Concentric's English subsidiary Moulded Plastics (Birmingham) Ltd. of Tamworth, England, plus the plastics molding operations of Concentric Inc. of Chicago and Concentric SA de CV of San Luis Potosi, Mexico.
The North American assets include molding plants in Itasca, Ill., and San Luis Potosi, according to Concentric.
Taken together, assets of the English and North American businesses being sold are worth nearly $10.8 million, but produced 1997 profit before interest and tax of just $100,000, according to Concentric.
Concentric is a Sutton Coldfield, England-based engineering company. The company is in the midst of a management buyout led by its chief executive officer, former Rover Group CEO John Towers. The purchasers consider plastics molding a noncore business; Concentric will use the sale proceeds to reduce its debt.
Key will make an initial cash payment of $8.65 million, plus a second of up to $835,000, depending on Moulded Plastics' net assets, according to Concentric.
Moulded Plastics, a pioneer in glass-fiber-reinforced nylon radiator end tanks, also produces polypropylene interior trim products for customers that include Rover and Honda Motor Co. Ltd. The molding firm employs 300.
The Tamworth plant has about 40 injection presses with clamping forces to 1,300 tons.
Key Plastics (UK) has 68 Sandretto injection presses with clamping forces up to 1,100 tons at its Coventry plant. The subsidiary employs roughly 300. It molds underhood components such as water bottles, battery trays, and power-assisted steering tanks, said sales director Dave Boden-Hook. Customers include Ford Motor Co., Rover, Honda and Magna International Inc.
``Key Plastics has grown very rapidly in the last few years. The addition of Moulded Plastics in the U.K. is a very neat product and market fit for us,'' he said.
Key has been expanding production steadily in Europe during the past two years. In late 1996 it bought a 36 percent share in Portuguese automotive radio bezel and trim molder Materias Pl sticas SA of Leiria. In August 1997 Key targeted the French auto market, acquiring interior and underhood parts maker Clearplas France SA of Belleme.
Key ranked 19th among North America's top injection molders with relevant sales of $251 million, 16 plants and 228 presses according to Plastics News' most recent survey. The company already has two plants in Chihuahua, Mexico, including one it bought from Aeroquip-Vickers Corp. last year.
Concentric plc, which employs 1,500, reported a $6.5 million loss on sales of $250 million last year, but turned in a pretax profit of $5 million for the six months ended March 31.