Platinum Equity has agreed to acquire the steering and half-shaft operations of auto supplier Delphi Corporation for $190 million (€132 million), according to documents filed with the Bankruptcy Court of Southern New York. As part of the sale Delphi will also receive $257 million from its former parent company, General Motors.
Delphi spun out from GM in 1999, and filed for bankruptcy in October 2005. Delphi decided to sell its steering and half-shaft business in 2006, and in January 2007 Delphi selected Platinum as the stalking horse bidder for an auction for the division.
Platinum, led by Beverly Hills billionaire Tom Gores, has acquired several corporate orphans from the battered US automotive industry. In September Platinum agreed to pay $500 million for two of PPG Industries’ automotive glass making divisions.
In 2005 the firm acquired American Racing Equipment, which makes aftermarket high performance automotive wheels, for $40.5 million. Platinum added on Boyd Coddington Wheels in 2006 for an undisclosed amount.
Platinum is one of many investors involved in the Delphi bailout. Delphi agreed earlier this year to accept $3.4 billion in financing from an investment group that includes Cerberus Capital Management, Appaloosa Management, Harbinger Capital Partners, Merrill Lynch and UBS Securities. The deal involved the purchase of $1.2 billion in convertible preferred shares and $200 million in common stock. An additional $2 billion was set aside to buy any common stock left unsubscribed as part of a planned rights offering.