Safety Components to Buy Largest North American Airbag Fabric Supplier
1 July 1997
Safety Components to Acquire Largest Supplier of Fabric to the North American Automotive Airbag Industry- Company Estimates Acquisition Will Add Over $80 Million in Revenues - COSTA MESA, Calif., July 1 -- Safety Components International, Inc. , one of the world's leading manufacturers of automotive airbags, announced today that it has entered into a definitive purchase agreement with JPS Automotive, L.P., a recently acquired subsidiary of Collins & Aikman Corporation to acquire its Air Restraint and Technical Products Division. This acquisition is expected to add over $80 million to Safety Components' revenues, resulting in consolidated revenues in excess of $200 million. Under the $56.3 million cash acquisition, Safety Components will purchase the assets and assume the operating liabilities of the Air Restraint and Technical Products Division, including 18 looms scheduled for delivery before the closing. In addition, Safety Components will assume existing debt of under $1 million in the form of capitalized leases. The Company is currently negotiating the purchase of a 350,000-sq. ft. building directly adjacent to the existing manufacturing facility for an estimated purchase price of approximately $1.25 million dollars. Consummation of the agreement is subject to certain conditions, including a financing condition. Financing for this acquisition is expected to be obtained from the proceeds of the issuance of $80 million in 10-year senior subordinated debt securities. The balance of the proceeds will be used to repay existing bank debt. The Air Restraint and Technical Products Division, operating out of Greenville, South Carolina, is the largest supplier of fabric to the airbag industry in North America with an estimated 40 percent market share. The Division has as customers all major tier-one suppliers, including TRW, Allied, Delphi and AutoLiv (formerly Morton). The Division will operate as a wholly- owned subsidiary of Safety Components, and key members of the Division's senior management team will remain with the company upon completion of the acquisition. "This acquisition, which continues the industry's consolidation trend, represents an outstanding opportunity for Safety Components," stated Robert A. Zummo, Chairman, President and Chief Executive Officer of Safety Components International. "The addition of the Air Restraint and Technical Products Division fits our strategic plan to become the industry's global, low-cost leader in airbag fabric and cushion manufacturing and enhances the timing of our China joint venture by enabling us to introduce the Division's technical weaving capabilities to that continent. This acquisition is expected to be accretive to Safety Components' earnings during the first year of ownership, will further vertically integrate our airbag business and could result in significant opportunities to grow the company both internally and through further acquisitions." This release contains forward-looking statements. There are certain important factors that could cause results to materially differ from those anticipated from the statements made above. These factors include, but are not limited to: the ability of Safety Components International to consummate the financing necessary for the acquisition of the Division and the continued performance by the Division at, or above, historical levels; world-wide automotive sales; automotive labor strikes or business interruptions; fluctuations in world-wide economic conditions; dependence of revenues upon several major module suppliers and pricing pressures. Additional information on these and other factors that could potentially affect the Company's financial results may be found in the Company's filings with the Securities and Exchange Commission. Safety Components International, Inc. is an international manufacturer of automotive airbags and a supplier of ordnance and other related defense products with manufacturing facilities in North America, Europe and Asia. SOURCE Safety Components International, Inc.