CADILLAC, Mich.—France's MGI Coutier Group has acquired parts producer Avon Automotive Holdings Inc. to gain a U.S. manufacturing base and expand its operation globally.
The companies were slated to close the deal July 6 and Avon has been consolidated into automotive parts producer MGI Coutier S.A., an MGI Coutier official said. Avon will retain its present name.
Avon Automotive makes low-pressure rubber and silicone hoses and ducts, and employs about 3,500 globally, with about 60 percent of its staff based in North America.
The Tier 1 supplier operates 10 plants in eight countries: the U.S., Mexico, France, Spain, Portugal, Czech Republic, Turkey and India. All of the firm's facilities are included in the sale, as are its commercial offices in England, Japan and Germany. Avon Automotive will remain headquartered in Cadillac.
With those additions, MGI Coutier has about 30 factories located near major automotive markets, with North America becoming its second-largest market. Its work force grows to about 8,000.
The present management team will continue to run the Avon Automotive operation and the firm's work force will remain in place, according to the official.
While financial details weren't disclosed, MGI Coutier said loans from three banks are being used to fund the transaction. The company, which was formed in 1972 and has a solid global position in the automotive parts market, said that, thanks to a strong balance sheet, its debt/equity ratio will remain below 50 percent in 2011 and 2012.
The Champfromier, France-headquartered firm gains a sizable manufacturing foothold in the U.S. with the acquisition of the cooling, fuel and air induction products and systems producer.
It will realize a significant benefit from Avon Automotive's rubber and silicone hose technologies along with its customer and production bases, the MGI Coutier official said.
The new technologies are especially important because MGI Coutier is a specialist in the storage, treatment and distribution of fluids, the firm said. Those products play an important role in the engine environment, it said, and particularly in the cooling function for present and future vehicles.
Technical expertise in the design and manufacture of complex rubber and silicone goods has allowed Avon Automotive to handle a diverse customer base that includes Ford Motor Co., General Motors Co., Nissan Motor Co., Toyota Motor Corp., Chrysler Group L.L.C., Jaguar Cars Ltd., Renault S.A. and others, MGI Coutier said.
The deal not only expands MGI Coutier's geographical presence as well as its product portfolio, it gives the French company momentum, helping it to speed up its growth and strengthen its position in the automotive supply sector, the firm said.
The acquisition of Avon Automotive, which had sales in the $276 million range last year, will boost MGI Coutier's revenues to almost $900 million annually.