Bloomberg News

Carlyle’s Metaldyne Said to Draw Apollo, Linamar Bids

July 21, 2012

Apollo Global Management LLC (APO:US) and Linamar Corp. (LNR) are among bidders in the second round of the auction for Carlyle Group’s Metaldyne, a maker of engine components, two people familiar with the sale process said.

Linamar, a Guelph, Ontario-based maker of axles and drive shafts, and Apollo bid about $825 million, or about 5.5 times last year’s earnings before interest, taxes, depreciation and amortization of about $150 million, said the people, who asked not to be identified because the information is private. Bank of America Corp. (BAC:US) is handling the sale, the people said.

Carlyle, which raised $671 million in an initial public offering in May, led a group of investors that acquired Metaldyne out of bankruptcy for $39.5 million in 2009. The group also assumed $32 million in obligations and $425 million of the company’s secured debt, most of which Carlyle held. The company probably will sell for more than $900 million, one of these people said. Metaldyne had 2011 revenue of about $1 billion.

Linamar declined to comment, Andrea Bowman, an assistant to Chief Executive Officer Linda Hasenfratz, said yesterday. Spokesmen for Carlyle and Apollo declined to comment. David Lawson, a spokesman for Metalyne, didn’t immediately answer a voice message and e-mail seeking comment.

2009 Bankruptcy

Metaldyne, based in Plymouth, Michigan, filed for bankruptcy protection in May 2009, citing the global slowdown in automobile sales and an inability to obtain financing. At the time Metaldyne was a unit of Asahi Tec Corp. (5606), which acquired it in 2007.

Metaldyne, which has 24 facilities in 13 countries, employs about 4,000 people making the rods that connect pistons to crank shafts, as well as pistons, clutch modules and transmission covers. Its customers include automakers General Motors Co. (GM:US), Volkswagen AG (VOW), Ford (F:US) Motor Co. and suppliers BorgWarner Inc. (BWA:US), and Linamar.

Linamar also makes metal engine parts for light and heavy- duty vehicles, including cylinder blocks and heads, crankshafts, pistons and connecting rods. The company, whose customers include Ford, GM and Caterpillar Inc. (CAT:US), had C$2.86 billion ($2.83 billion) in revenue last year.

Carlyle Group (CG:US), based in Washington, rose 1.8 percent to $23.42 at the close yesterday in New York. Linamar fell less than 0.1 percent to C$21.99.

To contact the reporters on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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Companies Mentioned

  • APO
    (Apollo Global Management LLC)
    • $26.2 USD
    • -0.06
    • -0.23%
  • BAC
    (Bank of America Corp)
    • $14.98 USD
    • -0.27
    • -1.8%
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