Yanfeng Automotive Interiors is selling its injection molding operation in Grand Rapids, Mich., to Green Light Growth Partners LLC, a new metro Detroit-based private equity firm focused on the auto industry that is making its first deal.
Yanfeng officials signed an asset purchase agreement to sell the operation to Green Light in a transaction expected to close in December, according to an Oct. 30 statement from Yanfeng.
"We are selling Grand Rapids to balance our product portfolio, optimize our manufacturing footprint and prioritize our capital investments," the statement says.
Terms of the deal were not disclosed.
Shanghai, China-based Yanfeng has 110 locations in 20 countries where more than 33,000 employees design and manufacture interior components for all automakers. Its YFAI unit was established in 2015 as a joint venture between Yanfeng and automotve seating manufacturer Adient plc.
The 400 Yanfeng employees in Grand Rapids will transition to Green Light, which will rename the business Kendrick Plastics Inc. The name reflects the site's address at 5050 Kendrick St., in Cascade Township in suburban Grand Rapids.
"The operation has an extremely dedicated and high performing workforce and our investment is premised on retaining the team," Josh Schulze, managing partner of Green Light, told Plastics News. "There is no plan for layoffs, but to the contrary, there is a plan to add additional employees in conjunction with the transaction and then further expand the workforce as new business is sourced over the coming years."
Schulze said the firm's first acquisition brings it a "highly successful" operation with great potential for all stakeholders.
"We believe that there is a large market opportunity within interior trim and that will be the immediate and near term focus of Kendrick Plastics," Schulze said in an email. "In the medium to long term, who knows. We'll be working collaboratively with our customers to determine how the product and process expertise at Kendrick can best serve their needs."
The facility currently produces Class A interior trim components and assemblies, which Schulze describes as an attractive subsegment of the industry.
"Not only is it powertrain and advanced mobility agnostic — meaning that these products won't get displaced by vehicle electrification, ride sharing or autonomous driving — but we expect to see an increased emphasis placed on interior aesthetics as OEMs pursue their respective brand differentiation strategies over the coming years," Schulze said.
Green Light has no immediate need to invest significant capital in the operation, he added.
"Although this Grand Rapids operation was potentially not core or not strategic for YFAI as it executes on its go forward plan, it was in no way orphaned," Schulze said. "YFAI has invested significant capital in Grand Rapids to ensure consistent quality, service and delivery across each of its operations."
However, Green Light is evaluating strategic investment opportunities to position the business for continued growth, Schulze said.
Prior to founding the firm, he was a senior managing director at Ernst & Young Capital Advisors LLC. Schulze led the practice for U.S. automotive and transportation investment banking and served as the sector leader for advisory services across the Americas.
Green Light is focused on Tier 1, 2 and 3 automotive companies in the U.S. and Canada that offer niche products and process technologies and post sales of $50 million to $150 million.