Delphi Hires Firm to Sell Off Divisions: Supplier Sheds Stake in Tech Company as Part of Strategy

Delphi Corp., the nation's largest auto-parts supplier, in recent days sold an $11.2-million stake in a broadband technology company and hired an outside firm to help sell two other businesses. The moves are part of Delphi's effort to become a leaner company focused on high-tech automotive components when it emerges from bankruptcy protection as soon as the middle of next year.

From Detroit Free Press

TROY, MI — Delphi Corp., the nation’s largest auto-parts supplier, in recent days sold an $11.2-million stake in a broadband technology company and hired an outside firm to help sell two other businesses.

The moves are part of Delphi’s effort to become a leaner company focused on high-tech automotive components when it emerges from bankruptcy protection as soon as the middle of next year.

Delphi was the majority shareholder in MobileAria Inc., a 30-employee broadband technology company based in Mountain View, CA, that enabled fleets of trucks to be used as mobile WiFi hot spots. Other investors in MobileAria include Palm Inc., which makes handheld computers, and the Mayfield Fund, an investor specializing in semiconductor and networking technology.

Delphi on Friday received bankruptcy-court authorization to sell its 71 percent stake to Wireless Matrix USA Inc., based in Reston, VA, for $11.2 million.

“We are committed to making a seamless transition that will be transparent to MobileAria’s customers,” Delphi spokeswoman Claudia Piccinin said.

Separately, Delphi announced Monday it hired investment banking firm Rothschild Inc. to help sell its Cockpits & Interior Systems and Integrated Closure Systems businesses. Delphi did not say how many employees work in those divisions, but they involve 11 plants globally, including one in Adrian, one in Orion and four elsewhere in the United States.

The decision to hire Rothschild is part of Delphi’s transformation strategy, announced March 31, to sell businesses it identifies as not core to the company’s future, said Delphi spokesman Brad Jackson.

Delphi said in a news release that any sale of the two business units would be in coordination with its customers, unions and other stakeholders.

The Troy, MI-based company has said it also might sell units including Brake & Chassis, Catalysts, Ride Dynamics, Steering and Wheel Bearings. Delphi filed for bankruptcy for its U.S. operations in October.

“The difficultly will be that this is a buyer’s market, and not a lot of companies are looking to make an acquisition to grow their business,” said Mark Oline, a Fitch Ratings analyst based in Chicago. “It may also be difficult for Delphi to reach agreements since a lot of these sales will come with some contingencies for the union workforce.”

Wilbur Ross, a billionaire U.S. investor who last week agreed to take control of Lear Corp.’s European auto-interior operations, said Monday that he might be interested in the Delphi units.

“We look at everything in the distressed auto world, and my guess is that we will look at these assets, though we haven’t done any due diligence on them as of yet,” Ross said.

He has said he intends to form three auto-parts makers by purchasing operations from other companies.

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