Castle Harlan leads auto accessories buyout

The New York-based firm has paid $260m for Advanced Accessory Systems, a manufacturer of automotive roof racks and towing systems in North America and Europe.

(PrivateEquityCentral.net) New York-based Castle Harlan today announced it acquired automotive accessories company Advanced Accessory Systems, a manufacturer of automotive roof racks and towing systems in North America and Europe, from JP Morgan Partners in a deal valued at $260m.

 

Advanced Accessory, based in  Michigan, has 18 manufacturing facilities throughout North America and Europe. Two-thirds of the company’s sales are to original equipment manufacturers in North America and Europe and one-third to the aftermarket.

 

Advanced Accessory had revenues of $328m and earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for certain non-recurring items, of $46.6m in the year ended December 31, 2002.

 

Advanced Accessory’s roof rack division, SportRack Automotive, has the leading market share in North America, while its European subsidiary, Brink International, is the largest supplier of towing systems in Europe, and its Valley Industries subsidiary is the second largest in North America.

 

Advanced Accessory’s current management, led by president and chief executive officer Terence Seikel, will be retained and will continue to hold equity in the company.

 

The company had been owned by JP Morgan Partners, which owns more than 68.9 per cent of Advanced Accessory's stock and stands to make an approximately $80m profit from the sale. JP Morgan Partners provided capital to launch Advanced Accessory in September 1995 as a platform to make strategic acquisitions of automotive exterior accessory makers. The AAS transaction represents the first acquisition by Castle Harlan Partners IV, its fourth private equity investment fund.

 

In January, Castle Harlan acquired French marking device company Technifor, which manufactures marking devices for permanent product identification in the automotive and aeronautics industries, with plans to merge it with portfolio company Gravograph New Hermes.

 

Castle Harlan was founded in 1987 by John Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and Leonard Harlan, founder and former chairman of The Harlan Company. Since its foundation, Castle Harlan has completed acquisitions exceeding $5bn.