Tower Automotive Acquired in $1 Billion Deal
Tower Automotive Inc. said Wednesday it will sell all its assets to Cerberus Capital Management LP in a deal valued at $1 billion — a transaction that highlights the growing role of private equity firms in the restructuring of the U.S. automobile industry. The sale will pay off Tower’s $725 million debtor-in-possession loan and $41 million in second-lien loan obligations, according to Tower spokesman Joe Kirik. Tower’s official committee of unsecured creditors supports the sale, which is expected to close on July 31 according to a company press release.
Goodyear to Sell Engineered Products Business to Carlyle Subsidiary
Goodyear Tire & Rubber Co. has announced plans to sell its Engineered Products business to EPD Inc., an organization owned by private equity firm Carlyle Group, for $1.475 billion. Goodyear stated in a release that the transaction is subject to customary closing conditions, including regulatory approvals and a completed labor agreement between EPD and the United Steelworkers. Goodyear has also agreed to a trademark licensing agreement with EPD to use the Goodyear brand and other trademarks in connection with the Engineered Products business.
Delphi Accepts $3.4 Billion in Financing
Auto parts supplier Delphi Corp. said Monday it has accepted a $3.4 billion investment from a group of private equity companies to support its emergence from bankruptcy protection. Under the deal, affiliates of Appaloosa Management LP, Cerberus Capital Management LP and Harbinger Capital Partners Master Fund I, as well as Merrill Lynch & Co. and UBS Securities LLC, would invest the company. The investment group will invest a minimum of $1.4 billion and a maximum of $3.4 billion in the struggling company in exchange for common and preferred stock that will be issued in the first half of next year.
Cerberus Considers Delphi Stake
The Wall Street Journal reported that private equity group Cerberus Capital Management, which earlier this year bought a controlling interest in General Motor Corp.’s finance arm, General Motors Acceptance Corp., is considering buying a stake in bankrupt auto-parts supplier Delphi Corp.
Dura to Relocate 2,000 Jobs Overseas
Dura Automotive Systems announced Friday plans to move 2,000 jobs overseas as part of an operational restructuring plan. The company’s board of directors aims to spend less than $100 million to move the 2,000 jobs, according to a form filed with the Securities and Exchange Commission Friday. Additionally, the board approved a plan to pay an aggregate of $952,480 to employees affected by the restructuring. In the same filing, the Rochester Hills, MI-based auto parts maker announced it has fully divested its German unit Dura Automotive Systems Kohler GmbH to the Hannover Finanz private equity group.
W.L. Ross & Co. Buys Two Auto Suppliers for $305 Million
Financier Wilbur Ross this week announced the latest progress in his mission to create a massive automotive supply company with the global footprint to match the automakers. This week, Ross added two automotive suppliers, Mitsuboshi Belting Kaseihin Co., Ltd. (MBK) from Tokyo Stock Exchange listed Mitsuboshi Belting, Ltd. and BST Safety Textiles GmbH (BST), formerly Berger Safety Textiles of Maulburg, Germany, from PPM Capital, the private equity division of Prudential plc, for a total price of $305 million, subject to normal closing adjustments.
Plymouth Rubber, Brite-Line Exit Chapter 11
Plymouth Rubber Company, and its wholly-owned subsidiary, Brite-Line Technologies, Inc., have emerged from Chapter 11, with new equity support from private equity firm Chrysalis Capital Partners, LP, and a new senior credit facility provided by Wells Fargo Business Credit. The companies’ Plan of Reorganization, which became effective Aug. 31, was approved by the U.S. Bankruptcy Court on July 26.
Amvescap Buys W.L. Ross for $3.5 Billion
Amvescap PLC of Britain will pay more than $3.5 billion to buy W.L. Ross & Co. LLC., a New York restructuring and money management group. W.L. Ross & Co. was formed in April 2000 by Wilbur Ross Jr. as a global fund manager for institutional investors, Amvescap said Monday. Since then it has sponsored alternative investments, including private equity funds, co-investment vehicles and hedge funds in the steel, textile, coal, automotive and financial services industries.
Expert: Auto-Parts Makers in Trouble
A leading turnaround adviser on Thursday painted a bleak picture for the automotive parts supplier industry, saying that high debt levels and falling volumes at U.S. auto makers could lead to more defaults and filings for bankruptcy protection. An industry that saw the recent Chapter 11 filings of Delphi Corp., Dana Corp., Collins & Aikman Corp. and Tower Automotive Inc. still has the deck stacked against it, said Al Koch, vice chairman and managing director at Southfield, MI-based AlixPartners LLC, a turnaround firm, and at Questor Management Co. LLC, a private equity firm.
Adams Returns to MaddenCo as VP
Jay Adams has joined Evansville, IN-based MaddenCo Inc. as vice president of marketing, sales and installation and as general counsel. Adams was previously with the law firm Ice Miller LLP in Indianapolis in its private equity/venture services group. Prior to attending law school, he was a sales representative for MaddenCo.