Workers may benefit from the $2 billion acquisition of Veyance Technologies. German-based Continental AG brings a growth strategy.
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John Hamilton, the chief executive of Veyance Technologies, said the company is being bought by the best of the suitors. He was photographed in a company lab in Fairlawn in 2011. FAIRLAWN, Ohio--For most of its history, Veyance Technologies was called Goodyear Engineered Products, a division of the Akron tire maker whose roots go back more than 100 years.
After a mega deal announced Monday, the company stands to lose its Goodyear label but gain an enticing new one. It will become part of German automotive giant Continental, which bought Veyance from the hands of a private equity firm.
Veyance chief executive John Hamilton described the pending transition as the start of another, exciting, Goodyear-like era.
"I can say the time is right for the company to be back in the hands of strategic ownership--people who love the smell of rubber in the morning--and that's who Continental is," he said.
Continental AG, an auto parts and tire maker based in Hanover, Germany, paid The Carlyle Group $1.9 billion for Veyance, the principals said Monday.
The deal must yet clear U.S. anti-trust authorities, but company representatives said they expect to close the sale by the fourth quarter of 2014.
Plans call for Veyance to become part of Continental's ContiTech division, helping it to expand into global markets where Continental is little know and Veyance has a strong presence.
Continental is making no promises to current employees, a workforce that includes about 200 people at its headquarters in Fairlawn. But a top executive said workers can expect an era of growth, not stagnation or decline.
"In general, we bought the Veyance organization because we would like to grow," said Heinz-Gerhard Wente, the chief executive of ContiTech, who was at Veyance's Fairlawn offices on Monday. "I think we really demonstrated here that we are going in a strategic direction."
Veyance, which spun out of Goodyear in 2007, makes conveyor belts, hoses and other rubber-engineered products for heavy industry. It employs 9,000 people at 27 plants worldwide. The company reported revenues of $2 billion in 2013, with most of its sales coming from outside the automotive industry.
It's Ohio presence includes:
• The corporate headquarters off Interstate 77 at Cleveland -Massillon Road.
• A conveyer belt factory in Marysville that employs nearly 300 people.
• A plant in St. Marys that manufactures rubber tracks for tanks and tractors and employs about 400 people.
Wente said Continental must examine its new resources but that he expects it will need everything Veyance brings to the operation.
"I think we need all these capacities to achieve our growth," he said. "We need the people, we need the plants, we need the technology to achieve our growth plans."
Many of the workers at the two Ohio factories are represented by the United Steelworkers of America, which last year signed a contract with Veyance that runs through 2016. Union representatives declined comment on the sale.
Wente said no decision has been made on the Fairlawn headquarters, but added, "This is very efficient. It is very functional."
Continental AG, which calls itself the third largest automotive supplier in the world, employs 177,000 people in 46 countries. It reported sales of $45.4 billion in 2013.
The company makes Continental and General brand tires, in addition to car parts ranging from power trains to electronics.
Wente said Veyance will allow the company to move into new markets and new industries. Overnight, he said, 60 percent of Continental's business will fall outside of the auto industry.
Veyance is heavily represented in industries that move heavy loads by track and conveyer belts, like mining.
"We think it's good to have a balance beyond one industry," Wente said. "It's good for the stability of the company."
Veyance was born when the Goodyear Tire & Rubber Co. spun off its engineered products division in 2007, selling it to The Carlyle Group for nearly $1.5 billion.
Continental AG had tried to buy the company before. In fact, Veyance has heard from several suitors in recent times, Hamilton said.
"This is the one that's best for our company and our customers," he said.