12/17/2002 8:04:00 PM North Vernon plant under new ownership
north vernon plain dealer
By Bryce Mayer
Pilot Industries, including the North Vernon plant, will soon have a new owner.
Martinrea International, a Toronto, Canada, based company, entered into an agreement late last month to purchase Pilot Industries for $83.5 million from Cerberus Institutional Buyers LP. The transaction is expected to gain regulatory approval and be completed by the end of this month.
"This is a win-win situation," said Amy Ruth, director of human resources for Pilot Industries from that company's headquarters in Dexter, Mich. "It seems to be a perfect alignment."
Pilot Industries develops and manufactures fuel and fluid handling systems for the automotive industry. The North Vernon plant, where around 200 are currently employed, primarily makes fuel filler assemblies for Ford and DaimlerChrysler automobiles. The local plant also manufactures oil tube assemblies for Ford and fuel filler inlets for Harley-Davidson motorcycles.
Martinrea manufactures fuel and brake line assemblies, stampings and hydroformed metal parts primarily for General Motors. The deal could open the door to Pilot Industries, including the North Vernon plant, to produce more parts for GM.
Once Martinrea assumes ownership of Pilot, it will create the third largest manufacturer of automotive fluid systems in North America.
"We think we can build a strong future together," Ruth said. "Martinrea officials have made it very clear that their intentions are to add to the capacity of the North Vernon plant and continue its growth."
Cerberus Pilot Acquisition Limited Liability Company purchased Pilot Industries through U.S. Bankruptcy Court last February for $41.5 million in cash and an undisclosed amount of debt.
Cerberus Institutional Buyers LP, the parent company, is a holding company and New York investment house that specializes in buying troubled businesses and then re-selling them.
Pilot filed for Chapter 11 bankruptcy last December, listing more than $56 million in debt.
Pilot Industries was founded in 1977. In 1993, it purchased the former Arvin Industries plant in North Vernon. Pilot has four other facilities in the U.S.
"The addition of Pilot Industries to Martinrea's fluid systems group will create a dynamic enterprise that will continue toe excite and delight our customers with new and innovative products," said Morris Rowlett, Pilot chairman and chief executive officer, in a news release.
"The result will enhance Martinrea's exceptional manufacturing skill with Pilot's engineering excellent and superior product quality," Rowlett added.
"The strengths of both companies should make the new enterprise a formidable force in our market," said Robert Eckert, executive vice present of administration and chief financial officer of Pilot.
Martinrea was formed by a merger of Rea International and Royal Laser Tech, two Canadian companies, last spring.
"Martinrea is roughly the same size as Pilot, so this acquisition will double the company's size," Ruth said. "Martinrea is a growing company and publicly traded (on the Toronto stock exchange). We really think we can build a strong future together."
Ruth said Pilot's performance was so strong over the past year that companies were knocking at Cerberus' door seeking to purchase the 25-year-old business.
"The North Vernon community and Pilot employees there should feel good about this," ruth said. "It sets us up to go to the next level."