For an undisclosed figure, Lear Corp. had entered a deal to purchase specialty textile producer Guilford Mills from private equity firm Cerberus Capital Management. Lear said that Guilford, which produces fabrics for automotive and specialty markets, could reach sales of around $400 million each year. It’s likely that this transaction will be finalized in the second quarter of 2012.
In 2004, Guilford Mills was bought by Cerberus Capital Management, a New York-based private equity firm, for $107 million. In a statement, Matt Simoncini, Lear's president and CEO, said that acquiring Guilford is another step in Lear's strategy to reinforce its core businesses by raising its component capabilities.
This acquisition is expected to increase its global fabric design and development resources as well as give a boost to its technical expertise and add to its current seat trim capabilities in growing markets and fabric production in Asia. Headquartered in Wilmington, N.C., Guilford has been supplying fabrics to automakers and other industries for more than 40 years.
It specializes in fabric design, development, warping, knitting, dyeing, finishing and lamination. Lear claims that about 85% of Guilford's annual revenues come from automotive applications. The automotive division of Guilford makes fabrics for several automotive interior applications such as those for seat fabric. Several of this firm’s customers include BMW AG , Chrysler Group, Ford Motor Co., General Motors, Honda Motor Co., Nissan Motor Corp., Toyota Motor Corp., and Volkswagen AG. On Wednesday on the New York Stock Exchange, Lear’s shares closed at $43.98