The automotive market is evolving in a number of ways, among them a shift to more extensive onboard communication and control systems and expanded use of electric drivetrains. That means (among other things): more wire.
General Cable Corp., Highland Heights, Ky., highlighted this shift in automotive demand when it announced the acquisition of Prestolite Wire LLC, a privately-owned manufacturer based in Plymouth, Mich., with production facilities in the U.S. and Mexico. Prestolite makes a broad range of wire and cable products and harnesses, mostly for automotive original equipment manufacturers (OEMs) and their “tier one” suppliers. Terms of the deal were not disclosed. In 2011, Prestolite reported revenues of $170 million.
“In addition to growth trends forecasted for new vehicles over the next couple of years, vehicle designs are rapidly evolving due to demands for greater fuel efficiency and enhanced communication capabilities,” said Craig Horton, General Cable's product manager, Automotive, in a General Cable release. “OEMs are implementing alternative materials, resulting in higher operating temperatures, electric or hybrid propulsion technologies, enhanced communication systems and interconnectivity of vehicle management systems. As a result, the complexity and volume of wire and cable products consumed in vehicle designs is expected to continue to increase.”
Prestolite's products focus on flexibility, abrasion resistance and high-temperature insulation. General Cable already has a presence in the car market, but was particularly attracted to Prestolite's “sharp focus on high temperature and abrasion- and corrosion-resistant applications,” according to Roger Roundhouse, senior vice president and general manager, Transportation Wire & Assemblies, General Cable, in a release. “This acquisition is highly complementary to our existing transportation related businesses as approximately 90% of Prestolite's revenues are generated from products that are incremental to the company's existing product portfolio.”
Greg Ulewicz, president of Prestolite, will remain with General Cable and continue to run the Prestolite Wire business.
In the release, Ulewicz said he was pleased to see Prestolite acquired by a strategic buyer. “The combination of General Cable's broader capabilities and geographic reach coupled with Prestolite's product offering and access to markets in the transportation related industry makes synergistic sense and presents significant future opportunities for our combined business,” he said.