A major United States steel company is set to buy an Ontario auto parts supplier in an effort to cash in on the auto sector’s lightweighting business.
AK Steel has signed an agreement to acquire Precision Partners Holding Company, based in Windsor, Ont., for Cdn $463.7 million (US $360 million).
Precision Partners is a leading North American auto parts company that provides engineering, tooling, die design and hot and cold stamped steel parts for the industry. It employs more than 1,000 employees, including about 300 engineers and skilled toolmakers, across eight plants in Ontario, Alabama and Kentucky.
AK Steel said in a statement that the acquisition advances its “core focus on the high-growth automotive lightweighting space and its prominent position in advanced high strength steels.
“This acquisition will combine the best of both companies, bringing AK Steel’s innovation in materials and manufacturing together with Precision Partners’ tooling and stamping knowledge and technology, to create a differentiated, innovative leader in the steel industry,” AK Steel CEO Roger Newport said in a statement.
AK Steel Holding Corp. is a Fortune 500 company headquartered in West Chester Township in Ohio and employs about 2,400 full-time workers.
Better service, added value
Kirk Reich, AK Steel’s president and chief operating officer, told the Dayton Daily News in Dayton, Ohio, that Precision Partners is already “a supplier to 13 of the 15 best-selling vehicles in the United States.”
“Not only will we be able to better serve the OEMs, but we will also be able to add value to our other existing automotive market customers along the supply chain through better support and solutions, be they engineering, tooling, advanced materials or stamped products,” Reich told the newspaper.
AK Steel intends to finance the acquisition with a combination of debt and equity securities. The transaction is subject to closing and regulatory approvals in the United States and Canada.