Dana Agrees to Sell Aftermarket Business, Reports Strong Earnings
Dana Corp. has announced an agreement to sell its automotive aftermarket business to The Cypress Group, an equity investment organization based in New York, and has also reported strong second-quarter earnings.
The company credited strong sales in the North American heavy-truck market with helping double the company’s second-quarter profits. Dana also received a $33 million boost in tax benefits from the sale of its automotive aftermarket business.
The company earned $108 million, or 72 cents per share, in the second quarter compared with $52 million, or 35 cents per share, for the same period a year ago.
Excluding one-time items, the company earned 49 cents per share, matching expectations of analysts surveyed by Thomson First Call. Sales for the quarter were $2.3 billion, an increase from $2 billion a year ago.
The company’s stock rose $1.33, or 7 percent, to $19.58 in morning trading on the New York Stock Exchange. (All figures in U.S. dollars.)
Dana announced weeks ago that it had reached a deal to sell its replacement parts unit for $1.1 billion in cash to a New York-based equity group, The Cypress Group.
Interestingly, Cypress managing director Michael Finley said that Larry McCurdy and Joe Onorato, former CEO and chief financial officer, respectively, of Echlin Inc., which became part of Dana, will serve as directors of Cypress’ new investment.
Credit Suisse First Boston LLC and Goldman, Sachs & Co. are acting as financial advisors to Dana Corp.
The sale of the Automotive Aftermarket Group included 52 plants worldwide that employ about 13,000 people. The business had sales of about $2 billion in 2003, or about a quarter of Dana’s overall annual sales.
The Toledo-based company plans to use money from the sale to reinvest in its core businesses, reduce debt, and add to its pension plans. Dana employs 45,000 people worldwide.
Hastings Tools Picked Up by B.C. Company
JET Equipment & Tools Ltd. of Burnaby, B.C. has announced that it has purchased the hand tool inventory and packaging equipment from Hastings, Inc. of Barrie, Ont., which recently ceased operations and is under the direction of the receivers.
JET will offer the established line of Hastings specialty automotive hand tools and equipment as well as products sold under the brand names Ferret, Neway, and Kal Equipment.
The offerings include hand tools, air tools, and material handling equipment and machinery, under the JET and ITC brands. In the U.S., JET will continue to distribute and grow Hastings brand hand tools under the business name of H.S.T. Tool Company.
Established over 50 years ago, Hastings is a well-established and recognized brand of automotive tools in both Canada and the U.S.
In a press release, JET indicated that the company was excited at the opportunities this acquisition allows. Customers will have access to JET’s existing offerings as well as the Hastings line of tools.
In the U.S. the company we will be continuing to distribute and grow Hastings brand hand tools under the business name of H.S.T. Tool Company.
NAPA Forms Alliance With Computer Firm
NAPA Canada has announced that it has formed a strategic alliance with COSTAR Computer Systems of Edmonton, Alta.
COSTAR has been writing software for the automotive industry since 1975 and is the developer of the COSTAR Tire & Auto System shop management software.
Under the agreement, NAPA PROLink online parts ordering system is now an integral part of the COSTAR Shop Management System. The combination of COSTAR and NAPA PROLink is available now and exclusively to NAPA customers in Canada.
Bosch Unveils 50th Anniversary Promotion
Robert Bosch has announced a lucrative contest for counterpeople to celebrate the company’s 50th anniversary in Canada.
Through the contest, counterpeople are entitled to complete a mail-in ballot for the opportunity to win the grand prize of a Mercedes C230 Sports Coupe when they sell any Bosch automotive product to a garage. Second prize is a 36″ Sony HS TV with stand and Sony DVD home entertainment centre. Third prize is 32″ Sony HS TV with stand, fourth prize is 27″ Sony HS TV with stand, and fifth prize is one of five Sony digital cameras.
Counterpeople generate an entry ballot with every invoice. Promotion launch kits were forwarded in mid-July to jobber counterpeople.
The contest commences August 1st and concludes October 31st. The final draw for winning entries will be held November 18.
Uni-Select Atlantic Recognizes Reps
Uni-Select Atlantic held its annual manufacturers representative appreciation day and golf tournament.
Each year, Uni-Select Atlantic takes the opportunity to recognize the top three sales representatives who have provided outstanding service to its membership. A survey is sent out to each member with the following criteria to help them choose their top choices: effectiveness in helping achieve members’ sales goals, warranty, and detailing. This year, the organization presented five awards, as there were two ties.
The award winners were Barry Keirstead of Brake Parts Canada Ltd; David Altass of Federal-Mogul; Gary Walsh of NGK Spark Plugs Canada Ltd.; Stephen Thiffault of Federal-Mogul; and Terry Theriault of Blue Streak-Hygrade Motor Products.
Modine Canada Files for Bankruptcy
Radiator supplier Modine Canada, known formally as MCL Heat Transfer Products, filed for bankruptcy and assets are in the hands of receivers.
According to official records from the receiver, Beallor & Partners of Toronto, Ont., the company had some $600,000 in shortfall of assets against liabilities when bankruptcy proceedings commenced.
Few other details were provided. A full accounting of the proceedings is available at the receiver’s website.
Successful Fundraiser for Edmonton Jobber
Warehouse Services Inc. of Edmonton, Alta., successfully held its third annual customer appreciation day, bringing in close to 900 customers.
Customers of the company’s four branches braved rainy weather to make it the company’s best attended event to date, and helped to raise money for the Rick Gibson Memorial Award. Named in honour of the AIA divisional chairman who passed away suddenly last year, contributions go to second year Parts Technician Apprenticeship students at the Northern Alberta Institute of Technology.
Suppliers joined the Warehouse Services staff to accommodate the close to 900 customers that made it to the event. Everyone was treated to a free T-shirt and food. Over 1,800 Alberta Beef burgers were cooked and more than $5,000 worth of prizes were given away.
Grote Signs Deal to Distribute Truck Accessories, Lighting
Grote Industries, a manufacturer and marketer of vehicle lighting and safety systems primarily for the heavy truck and large vehicle market, has signed a distribution deal with Panelite to offers an expanded range of vehicle lighting products.
Panelite is a manufacturer of decorative stainless and chrome accessories in the Class 8 truck market.
The distribution deal between the two family-owned companies allows Grote to manufacture and sell Panelite products through their extended distributors that currently sell Grote products.
“This is a valuable partnership for both companies,” said Grote president Eric Morris. “Grote customers can now purchase 100% of vehicle lighting from our distributors and Panelite can utilize Grote resources to sell their product to a larger market.”
Bestbuy Shareholder Expands Operations
Bestbuy Distributors Limited has announced that one of the buying group’s shareholders, Halton Automotive, has expanded its operations.
The opening of Hamilton Auto Supply Inc. in Hamilton, Ont., increases Halton Automotive’s store count to four. The other three locations are DLN Auto Parts in Burlington, Ont., Halton Automotive in Georgetown, Ont., and the original Halton Automotive in Milton, Ontario.
In 1985, Bestbuy member Oakville Automotive became Halton Automotive. Devlin was selected as the 1996 Jobber News Magazine Jobber of the Year.
Midtronics Charges Actron Infringed Patents
Midtronics, Inc. filed a patent infringement lawsuit against Actron Manufacturing Company in Federal District Court in Chicago, the company announced.
The suit claims that an Actron product violates two patents that have been assigned exclusively to Midtronics in the area of battery testing technology.
Actron was acquired by SPX Service Solutions in July following the filing of this complaint though there is no indication the two events are linked.
Four years ago Midtronics and Actron Manufacturing Company reached an agreement to settle their differences and dismiss any and all pending legal activity against each other. The terms of the earlier agreement are confidential, but the recent charges would indicate that the Midtronics believes this agreement has been violated by Actron.
According to Steve McShane, Midtronics CEO: “It is with deep disappointment that we feel the need to challenge Actron again on infringement of additional battery testing patents. Our commitment to the industries we serve necessitates regular innovation, and that innovation must be protected from infringement.”
Spectra Premium Acquires Interest in Component Manufacturer
Spectra Premium Industries Inc. has agreed to acquire a 90% interest in Trimag, L.P., a supplier of magnesium alloy parts to the automotive industry.
Trimag’s head office is located in Boisbriand, Que. Investissement Qubec will own the other 10% of interest in Trimag.
Lund Acquires Accessories Manufacturer
Lund International, Inc. announces the purchase of certain assets of Trenz located in Bakersfield, Calif., in a bankruptcy sale.
Trenz is a wholly owned subsidiary of PAC Holding Company. Trenz supplies custom grilles to aftermarket warehouse distribution and catalogue customers. Trenz also offers interior and exterior accessories, bumpers, and custom steering wheels.