Dec 31 2012
Tower International, Inc., a leading integrated global manufacturer of engineered structural metal components and assemblies, today announced that it sold its Korean operations in order to strengthen its overall business and realize shareholder value.
Under the agreement reached earlier today, Tower sold 100% of the stock in its wholly-owned Korean subsidiary to SECO, a privately owned Korean auto parts supplier. The sold operations include 5 manufacturing plants, a tooling plant, and a headquarters/technical center. Financial results for full year 2012 were projected at revenue of $345 million, Adjusted EBITDA of $25 million, and free cash flow of negative $5 million.
Tower will receive an estimated $47 million in cash (50% at closing, 40% January 2013, 10% December 2013), and the buyer will assume net debt that averaged $98 million for the last twelve months through November, representing a transaction enterprise value of approximately $145 million or 5.8 times projected 2012 Adjusted EBITDA. This transaction multiple is significantly higher than the present multiple for Tower's common stock, which Tower estimates at approximately 3.4 times based on yesterday's closing price.
The transaction also represents significant balance sheet strengthening and de-risking for Tower. On a pro-forma basis excluding Korea, Tower's average net debt for the last four quarters through September 30, 2012 would be reduced by $128 million or 26%.
"This is a very positive transaction on many fronts," said Tower President and CEO Mark Malcolm. "We believe it provides significant immediate value to shareholders, plus it makes Tower a stronger company going forward. We also are confident that the new owner will provide a bright future and good opportunities for our loyal and dedicated former colleagues."
Source: http://www.towerinternational.com/