Ripplewood plans to expand auto parts firms

By Ben Klayman

DETROIT (Reuters) - U.S. buyout firm Ripplewood Holdings plans to expand the two large auto parts companies it controls by about $2.5 billion through acquisitions around the globe, a partner said on Tuesday.

Ripplewood will look to make acquisitions to boost Japan's Asahi Tec Corp. (5606.T: Quote, Profile, Research, Stock Buzz), a producer of malleable iron casting products that earlier this month announced a $1.2 billion deal to acquire U.S. rival Metaldyne Corp., and German die casting company Honsel International Technologies, Thomas Stallkamp said at the Reuters Autos Summit in Detroit.

"We believe in building global platforms," said the former president of Chrysler Corp. "We think supplier consolidation is going to continue."

Several U.S. part makers have gone bankrupt in recent years, including the country's biggest, Delphi Corp. (DPHIQ.PK: Quote, Profile, Research, Stock Buzz), due to production cuts by their customers, heavy labor costs and rising raw materials expenses. The list of U.S. assets on the market has grown, with companies such as Delphi, Visteon Corp. (VC.N: Quote, Profile, Research, Stock Buzz),Lear Corp. (LEA.N: Quote, Profile, Research, Stock Buzz) and others aiming to shed parts of their businesses.

Asahi Tec is 63 percent owned by RHJ International (RHJI.BR: Quote, Profile, Research, Stock Buzz), the holding company of Ripplewood that also includes Honsel. Ripplewood spun off Asahi Tec and other holdings onto Brussels' Euronext Exchange about 18 months ago.

Once the Metaldyne deal closes, Asahi Tec will be at $2.5 billion in annual revenue, with a strong presence in Asia and North America, Stallkamp said. "It's easy to see that going to $3.5 billion with a few acquisitions," he said.

When Asahi Tec reaches that goal will depend on how the auto sector develops over the next several years, he said.

Stallkamp said it would be logical to see Asahi Tec looking to buy in Europe to give it a balance of geography, but he said Ripplewood had no plans to combine Asahi Tec with Honsel, which is mostly in Europe.  Continued...