Automotive supplier LDM Technologies Inc., which recently developed an award-winning energy absorber for car bumpers, has put itself up for sale.
Sources familiar with the bidding said there are at least four companies checking out LDM, with a mixture of existing suppliers and financial players looking over the operations.
LDM reported sales of $390 million in fiscal 2002, ended Sept. 29. The company manufactures interior and exterior plastic automotive components and employs 3,595 in five states and Canada.
The Auburn Hills, Mich.-based company did not return two phone calls seeking comment.
The firm is owned by Richard Nash, 57, and Joe Balous, 76, who both have a 50 percent stake, according to the company's annual report. The owners have a set price for the company and if they do not get it there will not be a sale, according to a source familiar with the company.
LDM's owners want to reach an agreement by April 30, the source said.
``There's no crisis or need to sell,'' the source said. ``It's more like they have something pretty sitting in the yard and if somebody's asking or offering enough, it's for sale.''
The source said the sale process is a compromise by the two owners, with one seeking to sell while LDM is showing solid profits, and the other wishing to keep it intact.
The firm had profit of $1.8 million last year after four previous years of losses. The company also reported profit of $3.3 million on sales of $108.3 million for its first quarter, ended Dec. 31, according to statements filed with the Securities and Exchange Commission.
LDM offers a prospective new owner a proprietary product in the form of an injection molded energy absorber, which received a top award in 2000 from the automotive division of the Society of Plastics Engineers.
The system, developed with Plymouth, Mich.-based Concept Analysis Corp., uses a series of injection molded, high density polyethylene cones and can save at least $10 a bumper compared with more conventional, expanded polypropylene absorbers. It also creates greater design flexibility for carmakers, allowing for a more sweeping shape while still providing protection.
The bumper program won early sales with Ford Motor Co. and General Motors Corp., but the program launches were delayed until March and August last year. LDM spent $23.6 million on the system in 2001 and 2002, and built a new plant in Romulus, Mich., to produce it.
The company expects $75 million in annual added sales from the system.
That system could help the owners land a high price, said Edward Eberle, president of Bloomfield Hills, Mich.-based Seizert Hershey & Co.
``The greater interest you have increases the chances of a bidding frenzy and a higher price,'' he said. ``And I think [the bumper system] could boost the price if a buyer sees the value of a new technology.''
Among the companies interested in acquiring LDM's technology, sources said, are two firms involved in recent automotive acquisitions - Meridian Automotive Systems of Dearborn, Mich., and Carlyle Management Group, the financial turnaround firm creating Key Automotive Group.
Meridian, like LDM, is an exterior module specialist, producing composite body systems and metal and plastic bumper systems and components.
Backed by financial group Windward Capital, the firm purchased American Bumper & Manufacturing Co. in 1997, Lescoa Inc. in 1999 and Cambridge Industries Inc. in 2000.
Carlyle, meanwhile, entered the auto industry in 2001 with the purchase of Key Plastics LLC. Last year it formed Key Automotive Group, designed to act as an umbrella holding company for other acquisitions.
Carlyle also reportedly is considering the purchase of air-bag maker Breed Technologies Inc. Spokesmen for both firms declined to comment, noting that speculation in the automotive sector often involves the names of their companies because of past purchases.
Kosdrosky is a staff reporter for Crain's Detroit Business, a sister publication to Plastics News.