WL Ross, Lear in Buyout Venture

Private equity firm WL Ross & Co. and automotive interiors supplier Lear Corp. said Monday that they had signed a deal to create a joint venture to look for acquisitions in the automotive interiors sector.

The announcement was just the latest sign of consolidation in the U.S. auto parts sector, which has been buffeted in the last year by bankruptcy filings, including Delphi Corp.’s petition this month for protection under Chapter 11 of the U.S. Bankruptcy Code.

The sides said the joint venture would look at acquiring all or part of automotive interiors supplier Collins & Aikman Corp., which sought court protection in May.

WL Ross Chairman and Chief Executive Wilbur Ross in September expressed interest in Troy, Mich.-based Collins & Aikman, while Lear in August expressed interest in forming a joint venture with Collins & Aikman. Ross has bought most of Collins & Aikman’s bank debt.

In September, administrators handling the European businesses of Collins & Aikman said they expected to select a buyer for those European operations by the end of October. The short list of bidders includes Ross.

“We will evaluate all legitimate offers as we proceed with our reorganization efforts and are committed to acting in the best interests of our stakeholders, which include employees, customers and creditors,” said David Youngman, Collins & Aikman’s vice president of communications.

An acquisition of all or part of Collins & Aikman would be intended to give what have been poorly performing operations for both Collins & Aikman and Southfield, Mich.-based Lear the size and costs to generate profit, analysts said.

The proposed venture would include Lear’s interior systems segment but not its seating or electrical and electronics businesses, the companies said.

Shares of Lear rose $1.41, or 4.8%, to $30.52 on Monday.