Guide Corp. is up for sale again, meaning the largest automotive lighting maker in North America may have its third owner in six years.
The owners of Anderson, Ind.-based Guide told employees Aug. 5 that it was ``exploring opportunities'' for the sale to prospective buyers in the auto industry.
``Having well-established resources and a team of talented, knowledgeable and experienced people throughout the organization, Guide is now a business that can contribute to the operations of a strategic buyer,'' President Tom Dennig said in the news release.
Vehicle Lighting Inc., a holding company led by Southfield, Mich.-based turnaround expert B.N. Bahadur, bought Guide in early 2001. The company has more than 3,500 employees and $400 million in annual sales, with General Motors Corp. as its chief customer.
Detroit-based GM spun off Guide, its one-time lighting group, to private equity group Palladium Equity Partners LLC in 1998. Before they sold the firm to Vehicle Lighting, Palladium executives maintained they could not get the needed prices for products. At the time, neither Palladium nor Bahadur's group disclosed the purchase price, but industry insiders say Vehicle Lighting picked up the operation for a minimal cost.
Bahadur's other manufacturing interest, bumper maker Acsys Technologies Inc. of Oshawa, Ontario, is closing.
Since its separation from GM, Guide has beefed up its research and development and spruced up manufacturing operations that include injection molding in Anderson; Monroe, La.; and Monterrey, Mexico. The company has nearly 300 presses and ships more than 42 million lights annually.
Earlier this year, the United Auto Workers agreed to a two-tier wage structure that would allow Guide to hire new workers at a less-expensive $12.50 hourly base wage, compared with $22.95 for existing workers, reducing production costs going forward.
The company has some attraction for the right suitors, said David Eberly, senior manager director of mergers and acquisitions specialist Beringea LLC of Farmington Hills, Mich.
Guide's expertise and sheer production volume in lighting would be important for any company looking to build complete front- and rear-end module systems. Bumper suppliers such as Flex-N-Gate Corp. and Decoma International Inc. have been boosting their capabilities in complete modules.
``Guide gives someone the opportunity to do a complete system,'' Eberly said.
Urbana, Ill.-based Flex-N-Gate has been expanding rapidly, with the purchase of European bumper maker Dynamit Nobel Kunststoff GmbH earlier this year and a 2001 buyout of injection molder Ventra Group Inc.
Decoma, based in Concord, Ontario, has purchased two lighting companies to team with its front and rear module production - Autosystems Manufacturing Inc. of Belleville, Ontario, in 2001 and Federal-Mogul Corp.'s exterior lighting unit last year.
Guide's access to GM, where it is estimated to supply more than two-thirds of the automakers' exterior lighting in North America, also provides a good selling point, Eberly said.
Existing manufacturers may not be the only interested parties though, he noted. Private equity firms are renewing their interest in manufacturing, if they can find the right company at a good price.
``People have fought and bid the pricing up on technology and the [information technology] sector so that now [financial groups] are remembering that there are other companies out there that make things,'' he said.