Metaldyne Inc. has agreed to sell its North American forging operations to a new company led by a team of experienced forging executives. Forming Technologies Inc. has agreed to the purchase for consideration valued at $129 million ($79.2 million in cash, plus accounts receivable, assumption of debt, working capital, and some specified liabilities) for the business unit Metaldyne announced was available October 31, 2005.
Metaldyne states the purchase will close in the first quarter of this year.
The business includes the operations in Royal Oak, Fraser, Detroit, and Troy, MI; Canal Fulton and Minerva, OH; and Fort Wayne, IN. Capabilities will include cold-, warm, and hot forging, and Forming Technologies is calling itself “the largest independent provider of automotive forgings in North America.” Its products will be supplied to customers -- including Metaldyne -- for powertrain and drivetrain components, gears and shafts for transmissions and transfer cases, ring gears, clutch housings, bearing reaces, stem pinions, and wheel spindles, among other parts.
The CEO of the new company is Dr. Richard McDermott, former owner of MSP Industries. Also in the management group is are chief financial officer Rick Larkin, also with MSP Industries, and the chief operating officer is Lance Harris, a former operating executive with MascoTech. MSP Industries is now part of American Axle and Machine’s Metal Formed Products Division. MascoTech was the predecessor to Metaldyne's Forgings Business.
According to McDermott, "We are delighted to have executed this agreement and look forward to our return to the forging business in the weeks ahead. We will commit ourselves to serving the metal forming requirements of the North American market and will leverage these world-class manufacturing capabilities with a focus on expanding the technological frontiers of high production cold, warm and hot forming."
Harris continued, "We have acquired state-of-the-art production facilities with an unrivaled range of equipment to serve a diverse customer base including not only the North American auto manufacturers and numerous Tier One suppliers, but also customers in non-automotive sectors such as off- highway, heavy truck and fluid power applications. Concentrating our efforts on forging, as opposed to subsequent machining and assembly operations, will allow us to develop new relationships with customers that had previously viewed Metaldyne, with its wide-ranging capabilities, as a competitor."
Forming Technologies will be headquartered in Royal Oak, MI. It will supply forgings to Metaldyne under a long-term supply arrangement.