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Thursday, 20 February 2014 09:56

JCI to sell sun visor, headliner business to PE firm

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Johnson Controls concept for automotive headliners. Johnson Controls concept for automotive headliners. COURTESY PHOTO

Johnson Controls Inc. is shedding another part of its business with ties to West Michigan.

On Wednesday, Milwaukee-based Johnson Controls Inc. (NYSE: JCI) said it had a legally binding deal to sell its headliner and sun visor business to an affiliate of Atlas Holdings LLC, a Greenwich, Conn. private equity firm, the company confirmed to MiBiz.

The deal, which includes the operations that support the headliner and sun visor business in North America and Europe, was expected to close by April 30.

"We believe that divesting of these two product lines will improve the overall competitiveness of our interiors business, improve our profitability and enable us to further strengthen and focus on our core interiors business," the company said in a statement.

The deal affects employees at JCI's Maplewood plant in Holland. A spokesperson said the plant and employees would transition to Atlas upon the close of the sale. Some employees at the JCI Holland Tech Center will also be part of the transition.

The acquisition appears to mark Atlas Holdings' foray into the automotive sector. The private equity firm, which has $1.3 billion under management and closed on a $900 million fund in December, has investments in the building materials, capital equipment, energy, construction products and services, industrial services, packaging, paper, steel, and trading and distribution industries. Combined, its holdings had more than $3 billion in annual revenues. The company specializes in restructurings, turnarounds and other distressed operations.

The move into the automotive sector "could be an indication of incremental private equity interest in the industry – always a good thing," said Mike Wall, an analyst with IHS Automotive in Grand Rapids. The firm's operational experience will be key in improving the profitability of the visor and headliner business, he said.

Both businesses date back to JCI's acquisition of Holland-based Prince Corp. in 1996, Automotive News reported.

JCI's divestiture comes after the company announced in November that it was exploring "strategic options" for its automotive interiors business, which is based in Holland and designs and manufactures door panels, instrument panels, visors and a range of other interior components.

The company wanted to shed the interiors business as it continues to focus on its core automotive competencies in seating and batteries.

JCI also recently divested of its automotive electronics business in two transactions. It sold its HomeLink business that included a line of vehicle-integrated garage door, gate and lighting controls to Zeeland-based Gentex Corp. for $700 million in September. The company announced in January that it planned to sell off the remaining portion of the business to Van Buren Township-based Visteon Corp. for $265 million in a transaction that was expected to close by midyear.

Companies throughout the automotive supply chain have been shedding non-core and non-performing divisions in reaction to automakers not delivering on their promise a decade ago of sourcing entire interiors systems from a single supplier, according to industry experts.

Read 3457 times Last modified on Tuesday, 25 February 2014 22:27
Joe Boomgaard

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jboomgaard@mibiz.com

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