Carlyle to Buy Parts Supplier

From the Detroit Free Press

WASHINGTON, D.C. — Carlyle Group, the global private equity firm that recently agreed to buy Hertz Corp. from Ford Motor Co., is expected to announce that it also has agreed to purchase a local auto-parts supplier, AxleTech International, in Troy, MI.

The firm also might buy more automotive companies to expand its presence in Detroit by year’s end. The move comes after New York financier Wilbur L. Ross expressed interest in buying area auto suppliers including Delphi Corp. Financial terms of the deal were not disclosed.

AxleTech, which has $250 million in annual revenues and 450 employees, makes axles and other parts for the commercial, off-highway and military vehicle market. It’s privately owned by Wynnchurch Capital and other minority shareholders. The deal with Carlyle is expected to close in mid-October.

Gregory Ledford, director and head of the automotive and transportation team at Carlyle, said the move shows there is value in Detroit’s auto parts market, largely because of the volume of the business.

“We’re bullish on being able to put money to work,” in Detroit, he said in an interview with the Detroit Free Press. “We are investing in Detroit, and we’re looking for other opportunities out there.”

While he said he doesn’t think the value of local auto companies has bottomed out, he said restructuring and turmoil in the local auto industry have created affordable openings for private investors. The firm manages $31 billion.

“We will be a big player with the Tier 1 and Tier 2s,” Ledford said of the auto-supply industry. “There are opportunities.”

AxleTech CEO Mary Petrovich said no management changes are expected. Carlyle’s purchase, she said, brings more resources and important contacts to AxleTech, especially in the defense sector.

“I look forward to this next phase of growth and development,” she said.

AxleTech has its origins as the off-highway division of Rockwell, now ArvinMeritor, and it was established as its own company in 2002.

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