Financier Wilbur L. Ross Jr. has spent the past year creating an auto-supply giant. And he may not be done.
Since the end of 2005, the financier has taken International Automotive Components Group from a concept to a reality - one that will have more than $4 billion in sales, much of it in injection molded auto parts.
Armed with a definitive agreement signed Dec. 1 to acquire the interior systems division of Southfield, Mich.-based Lear Corp., IAC just added 26 manufacturing facilities in the U.S., Canada and Mexico generating $2.5 billion in annual business to its holdings.
That North American unit will join plants throughout Europe, Brazil, Japan and China within the joint venture backed by Ross' New York-based W.L. Ross & Co. LLC, Franklin Mutual Advisors LLC and Lear. Once the deal with Lear is complete, IAC will oversee 20,000 employees in 16 countries.
Lear will have a minority stake in the company and will funnel its own energy into its seating business. Executives said there are fewer opportunities within the interior auto parts area because of changing strategies by automakers and increasing costs to make those parts.
The deal, expected to be completed in early 2007, provides Lear with a 25 percent equity interest in IAC North America, with options for an additional 7 percent. Lear also will pay $25 million in cash into the joint venture.
Ross, meanwhile, has maintained that there are opportunities for global parts players.
The venture launched its acquisition spree by buying most of the European assets of Collins & Aikman Corp. out of insolvency. It also acquired Lear's European interior plants in a deal completed earlier this year.
It went on to add a controlling interest in Plascar Indústria de Componentes Plasticos Ltda. of Brazil - also once controlled by C&A, and an injection molder of parts for carmakers in South America.
It picked up Mitsubishi Belting Kaseihin Co. Ltd. of Japan, a molder of instrument panels, cockpits and other interior trim, in September, becoming one of the first U.S.-controlled auto suppliers in Japan.
And while IAC has made no formal bids to buy up plants that are now part of C&A's North American unit, Ross has talked about the potential of folding that business into the Lear operations, and in fact first proposed a giant interior supplier consisting of both companies' operations. C&A, based in Southfield, has been in Chapter 11 bankruptcy protection since May 2005, and told court officials in Detroit that it plans to sell off its holdings in whole or in parts.
There also are injection molding interiors plants available from Delphi Corp. - North America's biggest auto supplier, which also is in Chapter 11 protection - and from Automotive Components Holdings LLC, the Ford Motor Co.-controlled business consisting of former Visteon Corp. sites.
``I don't believe at any moment that [Ross] is going to stop buying,'' said one executive familiar with automotive mergers and acquisitions. ``He's at $4 billion, and he's going to keep going.''
Ross needs additional capacity to improve efficiency, so he may seek buyouts that will allow him to move contracts into those sites. IAC also could seek out facilities with a central location and newer presses that would allow him to improve work flow by shutting down two to three aging plants in favor of one consolidated facility.
``He's going to be able to pick and choose the opportunities as they come,'' he said.