LDM Technologies purchase fuels Plastech’s hopes for 2004
Fueled by this month's heavily financed acquisition of LDM Technologies, Plastech Engineered Products chairman and...
Fueled by this month’s heavily financed acquisition of LDM Technologies, Plastech Engineered Products chairman and CEO Julie Brown is reportedly projecting US $1.2 billion in sales during 2004 — up 20 per cent over 2003.
Combined sales for the two operations totaled about US $975 million last year, with the deal for LDM nearly doubling Plastech’s sales. (The LDM business includes a plant in Leamington, Ont.)
Plastech borrowed up to US $515 million, including US $100 million from a little-used line of credit, to purchase LDM, pay off that company’s debts, and re-finance its own debts, the Detroit Free Press Reports. Standard and Poor’s estimates the long-term debt to be about $442 million.
The debt has been rated as high-risk or speculative, with credit rating agencies citing concerns about such things as the small company’s high debt levels, the fact that most of its business is centered in North America, as well as the possibility of a slowdown in auto sales.
Most of Plastech’s business involves the Big Three, although the company hopes to secure more business from Toyota Motor Corp. and other offshore manufacturers through its contracts with Johnson Controls.
When offering her projections to the Detroit Free Press, however, Brown also noted that the company borrowed money in its early years, and paid most of it back within two years. The deal with Johnson Controls required further financing, although that was also paid pack in two years.
Alan Johnson, who was LDM’s president and CEO, is president and COO of the combined company, which has 6,000 employees and 33 plants.
Brown founded Plastech in 1988, and it has since become one of the 10 largest U.S. corporations owned by a woman.