Bumper maker Flex-N-Gate Corp. is making another big play for growth with the purchase of Germany's Dynamit Nobel Kunststoff GmbH. The move will boost Flex-N-Gate's total sales by two-thirds and make it a major player in Europe.
MG Technologies AG, the Frankfurt, Germany-based parent company of Dynamit Nobel Kunststoff, announced May 3 it will sell the plastics unit to Flex-N-Gate for 430 million euros ($513 million). The deal, set for completion during the third quarter of 2004, will add DNK's more than $1 billion in annual sales to Flex-N-Gate's current sales base of $1.5 billion.
Flex-N-Gate, an Urbana, Ill.-based metal processor, made little news for the bulk of its nearly 50 years in business. Purchased by Shahid R. Khan in 1980, the privately held company has spent the past three years moving onto a larger platform.
In 2001, Flex-N-Gate purchased plastic bumper fascia specialist Ventra Group Inc. of Oakville, Ontario, giving it the capability to provide automakers with both the steel bumper beam and its exterior face.
The Dynamit Nobel buyout will give Flex-N-Gate its first major European presence. Weissenburg, Germany-based DNK is among the top fascia suppliers in Europe, where it has 22 factories. Two-thirds of its business is in Germany.
DNK also makes other exterior parts, including thermoplastic body panels for DaimlerChrysler AG's Smart car.
The deal could prompt other acquisitions by Flex-N-Gate, one industry watcher speculated. In order to offer a complete metal and plastic bumper system, the company will have to augment its existing European operations, which consist entirely of six facilities in Spain.
``The bits and pieces don't fit together unless it's the opening of a global strategy,'' said Mitra O'Malley, a principal with ITB Group Ltd., a Novi, Mich.-based research company.