By Kirk Johannesen, The Republic senior reporter
ArvinMeritor Inc. will sell its Emissions Technologies group, which includes two Columbus operations that employ 950, to focus on other businesses.
The pending sale of the local Gladstone Plant and Walesboro Tech Center also essentially marks the end of the former Columbus-based Fortune 500 company called Arvin.
After the sale, only one ArvinMeritor facility will be left in Columbus: The North American Data Center, which was built after the merger of Arvin Inc. and Meritor Automotive Inc.
One Equity Partners' $310 million purchase of the Emissions Technologies group was announced Friday morning. OEP is a New York-based equity investment firm.
The ArvinMeritor North American Data Center was not involved in the sale and will remain at the InfoTech Park as an ArvinMeritor facility.
The ET group includes operations in 19 countries and 7,500 employees, or roughly 27 percent of all of ArvinMeritor's employees.
The group generated sales of $808 million in the quarter that ended Dec. 31.
When the sale is complete, projected in the third quarter of fiscal year 2007, the new Emissions Technologies company is expected to have headquarters in Columbus and Michigan.
Columbus Mayor Fred Armstrong and Corey Carr, executive director of Columbus Economic Development Board, said their understanding of the deal is that it would not affect the 950 employees at those plants.
Exhaust systems are manufactured at the Gladstone plant and the Walesboro Tech Center is used for research and development.
"Based on what I've been told, this is good for Columbus and good for ArvinMeritor," Armstrong said.
The mayor indicated that the Gladstone plant was already preparing to serve a new customer of One Equity Partners.
Armstrong and Carr learned of the sale in the morning when they received phone calls from Chip McClure, ArvinMeritor's chairman, CEO and president.
McClure said during a teleconference that the company wanted to reduce its size and focus on investing in light and commercial vehicle businesses. The capital from the sale would aid those investments.
McClure said ArvinMeritor recognized potential for growth in emissions technologies, but decided that business no longer fit the company's plans.
"This business will be better served by an organization that is strategically positioned to invest in its development and growth," McClure said.
McClure told Carr that OEP has other businesses in the automotive sector, so buying the Emissions Technologies group fits into OEP's plans.
"We believe that the worldwide push to reduce pollutants and greenhouse gas emissions will create long-term opportunities for companies focused on advanced exhaust and emissions technology," Lee Gardner, OEP senior partner, said in a news release.
ArvinMeritor's focus will be on chassis, drivetrains and vehicle safety and security.
McClure said ArvinMeritor doesn't have the resources to serve all people and therefore needed to narrow its focus to areas that best support the customers and shareholders.
"This is a win-win situation for everyone involved," McClure said.
Lin Cummins, senior vice president of communications for ArvinMeritor, said OEP was one of several companies with which ArvinMeritor negotiated over months.
She said OEP was deemed the right buyer because it wants to invest in research and development and grow.
ArvinMeritor launched the Emissions Technologies business group in August to develop products for light- and heavy-duty vehicles.
McClure said at that time:
"We see tremendous opportunities for growth in the emissions area and believe this new, focused group will help us maintain our leadership position in this growing market segment."
H.H. "Buddy" Wacaser, president of Emissions Technologies, and his management team will continue to lead the new company.
Armstrong said Wacaser would arrive in Columbus next week to meet with him and other community leaders.
Carr said having a headquarters in Columbus is significant.
"It's an opportunity to work more closely with management. It's a positive from a community standpoint because senior management will be more accessible," Carr said.
Armstrong said he received a call from an employee at the Gladstone plant who said he was happy about the news.
Carr said he understands anxiety some people might have with the sale because little is known about OEP, and nobody locally has talked to a member of OEP's management.
"Everyone wants to know OEP's intent and ... plans," Carr said.
He said people were concerned when AK Steel bought ArvinMeritor's tubing center, but employees have expressed satisfaction with that deal.
ArvinMeritor's shares fell 28 cents or 1.44 percent Friday, closing at $19.23. The Dow Jones Industrial Average fell slightly, while the NASDAQ and the S&P 500 posted slight gains.