Safety Components Acquires Largest Supplier of Fabric to the North American Automotive Airbag Industry
25 July 1997
Safety Components Acquires 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 25 -- Safety Components
International, Inc. , one of the world's leading manufacturers
of automotive airbags, announced today that it has completed the acquisition
of the Air Restraint and Technical Products Division of JPS Automotive L.P.
(the "Division"), a subsidiary of Collins & Aikman Corporation .
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 purchased the
assets and assumed the operating liabilities of the JPS Air Restraint and
Technical Products Division. The purchase price is subject to post-closing
adjustments. In addition, Safety Components made a payment to JPS at the
closing to enable it to pay off existing indebtedness of the Division of just
under $650,000 at the closing. As part of the transaction, the Company also
expects to acquire a 350,000-sq. ft. building adjacent to the existing
manufacturing facility in Greenville, South Carolina, for approximately $1.25
million.
Financing for this acquisition was obtained from the proceeds of the
issuance of $90 million in 10-1/8 percent, 10-year senior subordinated notes.
The balance of the proceeds will be used to repay existing bank debt and for
general corporate purposes, including future capital expansion.
The Air Restraint and Technical Products Division is the largest supplier
of fabric to the airbag industry in North America with an estimated 40 percent
market share. Currently, Safety Components accounts for 10 percent of the
global market for airbag cushions. The Division, which has as customers all
major tier-one suppliers, including TRW, Allied, Delphi and AutoLiv (formerly
Morton), will operate as a wholly-owned subsidiary of Safety Components under
the name Safety Components Fabric Technologies, Inc. Key members of the
Division's senior management team will remain with the Company.
"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," stated Robert A. Zummo, Chairman, President
and Chief Executive Officer of Safety Components International. It also
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."
"In a crowded market which issued over $4 billion of high-yield
instruments in the last week, the Company's joint lead managers, Bankers
Trust/Alex Brown, did an outstanding job in executing the offering," said
Jeffrey J. Kaplan, Executive Vice President and Chief Financial Officer. "As
a result of positioning the Company before the major high-yield investors and
their aggressive efforts, Safety Components was able to obtain a favorable
rate."
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 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 a leading, low-cost independent
supplier of automotive airbag fabric and cushions with operations in North
America, Europe and Asia. The Company is also a leading manufacturer of
value-added synthetic fabrics used in a variety of niche industrial and
commercial applications. In addition, Safety Components supplies metal airbag
components to its airbag customers utilizing its machining and stamping
capabilities gained from years as a military ordnance manufacturer and
continues as a systems integrator and manufacturer for ordnance programs.
SOURCE Safety Components International, Inc.