Two private equity groups are joining forces to buy Cooper-Standard Automotive Group, the vehicle sealing division of Cooper Tire & Rubber Co.
Cypress Group and Goldman Sachs Capital Partners, both based in New York, will spend about $1.16 billion for the unit, which has annual sales of about $1.6 billion.
Findlay, Ohio-based Cooper-Standard has one operation that processes plastics exclusively - an extruded body side molding plant in Cleveland - but is closing that plant. It also runs plastics lines alongside rubber processing operations in the United States, Mexico, South Korea, Brazil and France. The company produces vibration, noise-control and fluid-handling systems in addition to sealing.
Cooper Tire plans to use cash from the sale to pay down debt and will focus on its tire business, said Thomas Dattilo, chairman, president and chief executive officer, in a Sept. 17 announcement. The sale is set to close by the end of the year. Cooper Tire has overall debt of about $865 million.
``We believe that after the transaction is completed, Cooper-Standard Automotive will be well-positioned for continued strong growth under its new ownership,'' he said.
Rating agency Standard & Poor's took a negative view of the deal, noting that Cooper Tire is selling off a division that makes up about half of its overall sales.
``The sale of the fairly successful automotive unit ... would modestly weaken Cooper's business profile by reducing the size and scope of the company and diminishing its business diversity,'' analyst Martin King said.
The sale comes about a month after Cooper competitor GenCorp Inc. announced it had a deal to sell its auto sealing unit, GDX Automotive Inc., to financial buyer Cerberus Capital Management LP.
The two companies combined control more than 40 percent of the primary door seal and glass run channel sealing automotive business in North America and Europe.
