Former Honeywell Suitor Acquires Automotive Component Companies

Investment group Questor Partners, which was rebuffed by Honeywell last year in favor of General Electric, has announced the acquisition of two automotive component manufacturers.
Questor Partners Fund II, L.P. and other funds managed by Questor Management Company will acquire the assets and assume certain liabilities of Aetna Industries, Inc. and Zenith Industrial Corp. Terms of the transaction were not disclosed.
General Electric’s intended takeover of Honeywell eventually failed when it could not get assent from European regulators.
Aetna, headquartered in Centerline, Mich., is a manufacturer of large stampings and modular assemblies for the automotive industry. Zenith, headquartered in Roseville, Mich., is a manufacturer of smaller stampings and sub-assemblies. Aetna and Zenith are under common ownership and sell their products directly to automotive companies in North America.
In 2001, the combined companies had sales in excess of $325 million. Aetna and Zenith have filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code to facilitate the acquisition. The transaction is subject to an auction conducted under the guidance of the bankruptcy court and subsequent bankruptcy court approval.
“Aetna and Zenith fit the investment criteria of Questor Partners Fund II and we believe they will benefit significantly from the industry knowledge, financial resources, management acumen and turnaround skills that Questor brings to the situation,” said Jay Alix, co-founder and principal of Questor Management Company.
“The companies have excellent engineering capabilities and state-of-the-art manufacturing plants and have developed a reputation for excellence in program management, quality and on-time delivery with key customers in the North American automotive industry. Their future is bright.”
“The Questor investment will provide us with the capital appropriate to launch the new programs that our employees have worked so hard to win,” said Ueli Spring, CEO of Aetna and Zenith. “Teamed with Questor, Aetna and Zenith will be able to build on their strong history of quality and superior service to our customers.”
“The companies’ profitability has been depressed by reduced volumes in the North American automotive market, and they have been operationally constrained because of an excessive debt load. When they are relieved of excessive debt at the time of Questor’s purchase, we believe they will be well positioned to compete as an integrated supplier of stamped components and complex modular assemblies,” said Wallace L. Rueckel, a Questor principal who was involved in the transaction.
“The companies have won several new programs that will be launched over the next three years. We believe that the cost savings to be generated by integrating the companies’ operations and our conservative capital structure will position the combined company to continue to win increasingly complex programs in this competitive industry.”