updated 7/9/2004 11:16:01 AM ET 2004-07-09T15:16:01

Auto parts maker Dana Corp. said Friday it is selling its replacement parts unit for $1.1 billion in cash to a New York-based equity group, The Cypress Group. Dana’s shares rose 5 percent.

The sale of the Automotive Aftermarket Group includes 52 plants worldwide that employ about 13,000 people making brakes, filters and other parts. The business had sales of about $2 billion in 2003, or about a quarter of Dana’s overall annual sales.

The deal is expected to close in the third quarter, pending regulatory approvals.
The sale does not include Dana’s Clevite distribution and marketing operation in Ann Arbor, Mich.

Dana plans to use money from the sale to reinvest in its core businesses, reduce debt and add to its pension plans, said Dana chairman and chief executive Michael Burns.

“Dana will be a more streamlined company that is better focused on delivering world-class component and systems solutions to our customers,” Burns said.

The Cypress Group manages two private equity funds with more than $3.5 billion.
Cypress has had success investing in the automotive industry, including with Lear Corp, said Terry McCormack, president of the Automotive Aftermarket Group.

Dana’s continuing operations had overall sales of $7.9 billion in 2003 and the company employs 45,000 people worldwide.

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