Cambridge Industries Inc. is about to wrap up its biggest sale ever. Within weeks, if not days, the Madison Heights, Mich.-based automotive supplier should finalize a deal to sell itself to another company.
"We've been negotiating off a short list for several weeks," said John Sieg, vice president of marketing and communications, in a May 4 telephone interview. "We're close, but I can't comment as to the timing."
He would not name the final suitors, although one undisclosed insider close to the negotiations said Cambridge is negotiating a buyout with Meridian Automotive Systems, the Dearborn, Mich.-based company that grew out of the merger of American Bumper & Manufacturing Co. and Lescoa Inc.
Sieg would neither confirm nor deny if Meridian is involved.
"In the next couple of weeks, we expect we can give more definitive information," he said.
Meridian declined comment, but said officials may have something to say sometime this week.
Cambridge, with $541 million in sales last year, put itself on the market in February, facing extensive debt and the high cost of renovations and improvements to prepare for upcoming contracts, including making composite pickup boxes for General Motors Corp.
The company posted more than $30 million in losses last year, its third-straight year operating in the red, according to its annual report filed with the Securities and Exchange Commission.
Cambridge had net losses of $18 million in 1998 and $10 million in 1997. The last time it listed a profit was in 1996, with $1.1 million in the plus column.
The firm's prime financial backer, Bain Capital Inc., announced late last year it no longer would pour money into the company.
In March, Cambridge announced it had reached a financial agreement with its banks and selected customers to front the company enough money to continue operating until it completed a sale.
Analyst David Eberly, managing director of GMA Capital LLC in Farmington Hills, Mich., said he has heard from two sources that a sale is "imminent," although he hasn't heard the suitor's identity.
Meridian would make a good match, though, he said. Meridian already has experience in molding large exterior plastic pieces and metal parts. Adding Cambridge to the mix would position Meridian to market itself as a complete exterior supplier — much like Lear Corp. and Johnson Controls Inc. specialize in complete interior modules.
"It is a good fit with what [Meridian] does," Eberly said.
Meridian was formed from American Bumper's acquisition of Lescoa last year. American Bumper, based in Ionia, Mich., turned out bumpers for Ford Motor Co. and bought Grand Rapids, Mich.-based Lescoa, an injection molder of automotive lighting products, instrument panels, consoles, cup holders and electrical components.
The joint company accounted for more than $600 million in sales last year and moved its headquarters to Dearborn.
Regardless of who the buyer is, Cambridge has taken some strong steps to market itself under its own terms, Eberly said. Management acted quickly once it realized the depth of its problems, both to seek a buyer and to secure interim financing.
"You've got some very savvy people who are driving Cambridge," Eberly said. "They didn't wait for their backs to be up against the wall. That would have made things much more difficult."
Susan Halas from Crain's Detroit Business contributed to this story.
