A Tennessee metals and plastics company said it has agreed to acquire auto parts supplier Autocam Corp. in a deal valued at $300 million.
NN Inc. of Johnson City, Tenn., produces metal bearing, precision metal and plastic and rubber components for multiple industries, including automotive, agriculture and aerospace. The company has agreed to buy Autocam of Grand Rapids, Mich., for $244.5 million in cash and $25 million in stock, and it will assume $30.5 million of the supplier's debt. The sale is expected to close in the third quarter.
Autocam, which operates 15 facilities in the United States, Europe, South America and Asia, produces fuel systems, engines and transmissions, power steering and electric motors. It expects to generate about $250 million in sales for 2014.
NN, which is publicly traded, said it posted net income of $17.2 million on revenue of $373 million in 2013 vs. net income of $24.3 million on revenue of $370 million in 2012.
Both companies have in-house injection molding. NN's precision plastics division is based in Lubbock, Texas, while Autocam has two presses to make gears and overmolded components for its systems.
Monday's announcement is the second time Autocam has agreed to sell its majority stake since the company went public in 1991. Private equity firm Aurora Capital Group bought the supplier in 1999 for $121 million.
Penske Corp. CEO Roger Penske then acquired Autocam from Aurora in 2004 through a joint transaction with his investment firm, Transportation Resource Partners, and Goldman Sachs for $390 million. Autocam restructured its ownership twice after the sale, once in 2005 and again in 2007, to avoid filing for Chapter 11 bankruptcy. Autocam CEO John Kennedy subsequently bought back the debt in an agreement to regain a 60 percent stake.
Kennedy said the latest transaction is an opportunity for the supplier to expand its business.
“This transaction will bring together NN's and Autocam's complementary core strengths and values and will position this business segment to outgrow its end markets by taking advantage of global market trends in fuel efficient technologies such as gasoline direct injection systems, high-pressure diesel injection systems and variable valve timing,” Kennedy said in a press release.
The agreement does not include the supplier's affiliated Autocam Medical business.