Private equity group Cerberus Capital Management LP will pay $147 million to buy auto sealing specialist GDX Automotive from GenCorp Inc.
The deal, announced July 19, comes a week after conglomerate GenCorp of Sacramento, Calif., said it was in negotiations to sell Farmington Hills-based GDX to focus on other holdings.
``The sale of GDX represents a major step in our effort to transform GenCorp into a more focused entity,'' said Terry Hall, chief executive officer, president and chairman in a written statement. ``This transaction allows us to make available additional assets for investment in our aerospace and defense and real estate operations, where we believe we can achieve higher returns and growth.''
GenCorp expects the deal to be completed by November.
GDX posted sales of $786 million for GenCorp in 2003, but executives noted that increased cost-cutting pressure from automakers combined with higher material costs have hurt the firm. The unit finished the first quarter of 2004 with a loss of $14 million on sales of $184 million.
Cerberus is a New York-based investment firm that specializes in buying and selling companies with difficult prospects and outlooks. In 2001, it purchased Pilot Industries Inc. bankruptcy for $41 million. It shored up the sales base for the Dexter, Mich.-based maker of thermoplastic fuel lines and sold the company a year later to Canadian auto supplier Martinrea International Inc. for more than $85 million.