Parts Vendors' Shares Gain in Wake of Cooper Tire Deal

Parts Vendors’ Shares Gain in Wake of Cooper Tire Deal

Shares in auto-parts suppliers got a boost Friday from a billion-dollar deal in which two private-equity firms are carving off the parts business of Cooper Tire & Rubber Co. Cypress Group and Goldman Sachs Capital Partners have agreed to buy Cooper-Standard Automotive, a unit of Findlay, Ohio-based Cooper Tire, for $1.165 billion. Goldman Sachs Capital Partners is a private-equity investment arm of Goldman Sachs Group.

From AFX News Limited

NEW YORK — Shares in auto-parts suppliers got a boost Friday from a billion-dollar deal in which two private-equity firms are carving off the parts business of Cooper Tire & Rubber Co. Cypress Group and Goldman Sachs Capital Partners have agreed to buy Cooper-Standard Automotive, a unit of Findlay, Ohio-based Cooper Tire, for $1.165 billion. Goldman Sachs Capital Partners is a private-equity investment arm of Goldman Sachs Group.

Cooper Tire’s shares moved down nearly 2 percent, skidding 40 cents to $20.60 in recent trading, while those of other suppliers rose. Lear Corp., a Southfield, Mich.-based manufacturer of auto interiors and electrical systems, rose 21 cents to $55.81.

AutoNation, the Ft. Lauderdale-based auto retailer with a parts supply business, saw its shares rise 21 cents to $17.16. Shares in General Electric , the parent of GE Automotive, rose 53 cents to $34.06. Stock in both Visteon Corp. and Delphi Corp., big suppliers to General Motors, also rose, by about 1 percent and 2 percent, respectively.

Pending completion of the deal, Cooper Tire is likely to have a stronger balance sheet as it works to become virtually free of debt, said Deutsche Bank analyst Rod Lache. Growth in the company’s core tire business has been strained by not enough manufacturing capacity, something that Lache could change if the company funnels proceeds to several acquisitions, combined with share buybacks and the debt reduction.

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