Air Bag Maker SCI to Buy Collins & Aikman Unit
Auto air bag maker Safety Components International on Tuesday said it plans to acquire a major supplier of air bag fabric in hopes of gaining an edge in the fast-growing but increasingly competitive industry.
The deal calls for Costa Mesa-based Safety Components to pay $56.3 million in cash to purchase the air restraint and technical products division of JPS Automotive from parent Collins & Aikman.
The acquisition is expected to boost Safety Components’ annual revenue by more than $80 million, to about $200 million.
The JPS air restraint division, based in Greenville, S.C., is the largest supplier of air bag fabric in North America, with a 40% market share. Its customers include big air bag system manufacturers such as TRW, AlliedSignal and AutoLiv.
The unit would operate as a wholly owned subsidiary of Safety Components, with management remaining largely intact.
“It’s a fast-growing market--everyone wants to be in it,” said analyst Gary Krieger at Olde Discount in Detroit. “But . . . there’s going to be a slowdown in the next few years,” so companies are positioning themselves through mergers and acquisitions, he said.
In its fiscal year ended March 31, Safety Components earned $2.2 million on sales of $84 million.
Collins & Aikman, a major supplier of automotive interiors, acquired JPS in December for $220 million.
Safety Components closed at $9.75 a share Tuesday, down 25 cents, in Nasdaq trading.
