Piston Group, the auto supplier owned by former NBA star Vinnie Johnson, is expected to acquire Takata Corp.'s interiors subsidiary, Irvin Automotive Inc., sources familiar with the transaction said.
The deal, which is expected to be announced this week, could shore up Takata's finances as it prepares to sell the entire company in the wake of the largest recall in automotive history.
Ford Motor Co. and others initiated the conversation between Irvin Automotive, a supplier of seat-trim and headrest covers, and sun visors, armrests and console lids, with Piston, a source told Crain's Detroit Business, a sister publication of Plastics News.
The transaction would expand Piston's product line to interiors from assembly and sequencing of parts and expand its revenue by more than 50 percent. The integration of Irvin will boost automakers' minority-owned sourcing as well. Both companies work with plastics, but are not major plastic processors.
Piston has been growing with contracts from Ford and others. In 2012, Johnson's other entity, V. Johnson Enterprises LLC, announced the formation of a new joint venture with Valeo SA called Detroit Thermal Systems LLC.
Takata put Irvin on the market in February in search of a lifeline in the wake of the largest recall in automotive history.
As many as 100 million vehicles worldwide may ultimately be recalled due to faulty Takata airbag inflators linked to 14 deaths globally and more than 100 injuries. The airbags reportedly can explode, shooting shrapnel into the cockpit, injuring passengers.
Takata hired investment bank Lazard Ltd. to lead a financial restructuring in an effort to reduce the impact of the recalls. Takata estimated the recalls would cost the company more than $24 billion, Bloomberg reported in March.
Irvin employs roughly 7,100 people and takes in about $500 million of annual revenue with factories running at capacity, Bloomberg reported. Piston Group had revenue of $930.8 million last year.
Executives from Takata's customers, including General Motors and Ford Motor Co., are in Japan this week to review offers from several bidders for the company, Crain's Detroit Business reported last week.
Suitors for the Tokyo-based supplier of seatbelts and airbags include Michigan-based competitor Key Safety Systems Inc.; private equity firm KKR & Co.; Daicel, a Japanese manufacturer of airbag inflators that's jointly bidding with private equity firm Bain Capital; Urbana, Ill.-based supplier Flex 'N Gate and Swedish airbag maker Autoliv Inc., according to Bloomberg reports and the source familiar with the matter.
The automakers and Takata leadership will review the proposals in an effort to find the best possible match for the industry as Takata prepares to sell off its business, the source said.
The group will identify a smaller list of finalists for the final round of bidding, the source said.
While the acquisition of Takata doesn't need formal approval from the automakers, they have a vested interest in ensuring the buyer can continue to provide the industry with the airbags needed to keep production lines moving -- and any buyer would want assurances the automakers would remain customers.
Bids include the use of bankruptcy protection to mitigate liabilities from the recall, Bloomberg has reported.