- Represents second transaction in three-phase exit strategy; 90
percent of interiors business now under contract, offer or sold
- First transaction – sale of Duckyang shares – now
completed
- In line with prior guidance to exit all of interiors with
aggregate neutral value impact to Visteon
- Transaction supports Visteon's focus on core growth
businesses: thermal management and cockpit electronic
ecosystems
VAN BUREN TOWNSHIP, Michigan,
May 2, 2014 /PRNewswire/ -- Visteon
Corporation (NYSE: VC) today announced an agreement to divest the
majority of its global automotive interiors business to an
affiliate of Cerberus Capital Management, L.P. The transaction,
which is subject to regulatory reviews and other conditions, is
expected to be completed by Dec. 31,
2014.
Logo - http://photos.prnewswire.com/prnh/20001201/DEF008LOGO
Visteon also announced it has completed a previously announced
agreement to sell its 50 percent ownership stake in a Korean
automotive interiors joint venture, Duckyang Industry Co., Ltd.
(024900:KS), as part of the divestiture of its interiors business.
On March 19, Visteon announced the
agreement to sell its stake in the joint venture to certain
management shareholders of Duckyang and associated parties, for the
equivalent of about $24.1 million,
plus approximately $6 million in
dividends.
The operations to be sold to the Cerberus affiliate had revenues
of approximately $1 billion in 2013
and produce a range of automotive interior products supplied to
global vehicle manufacturers, including cockpit modules, instrument
panels, door panels and floor consoles. These operations encompass
15 manufacturing plants, five just-in-time assembly plants and six
engineering centers in Europe,
Asia and South America. As part of this omnibus
transaction, the Cerberus affiliate made an irrevocable offer to
purchase the interiors business in France, and Visteon France will now begin
consultation with employee representatives. In total, more than
4,000 manufacturing, engineering and administrative employees are
part of the business involved in the transaction.
Under terms of the agreement with the Cerberus affiliate,
Visteon will divest the interiors operations for nominal
consideration and will contribute up to $95
million to the business. The Cerberus affiliate will assume
approximately $20 million of pension
and other liabilities of the business, while Visteon will retain
ownership in certain real estate and other assets in South America and Europe worth, in aggregate, about $35 million. Visteon also will provide support
services to the Cerberus affiliate. Terms of this agreement are
generally consistent with previously provided guidance on Visteon's
exit of the interiors business.
Also, Visteon has agreed to provide a seller-backed revolver to
bridge any shortfall of a targeted $90
million of external credit facilities if the complete amount
is not available by closing, to be repaid by the buyer, if drawn,
once additional committed facilities are in place after the
transaction closes. The $90 million
of financing is not anticipated to be utilized at closing and
simply adds to the liquidity of the business. The amount of the
potential Visteon-backed revolver, if any, is difficult to assess,
but is not expected to exceed $20
million once all external credit facilities are put in
place.
"The transaction supports our previously announced intention to
divest our interiors business and focus on our core thermal
management and cockpit electronic ecosystems businesses, which
enjoy market-leading positions in segments that are growing faster
than the industry overall," said Timothy D.
Leuliette, Visteon president and CEO. "We are pleased to be
selling this interiors business to a well-capitalized,
operationally focused investment firm with a track record for
long-term value creation, where we think it will be an excellent
fit."
Dev Kapadia, a Cerberus managing director, said, "We are pleased
to make this long-term investment in Visteon's interiors business,
which has strong products, an outstanding management team, a
skilled workforce, excellent customer relationships and solid
manufacturing operations, including in emerging markets. Cerberus
has a strong track record of supporting companies in this industry
as they strive to reach their full potential, and we look forward
to using this business as a platform from which to pursue
additional acquisitions in the automotive interiors space upon
completing this transaction."
About Visteon
Visteon is a leading global automotive supplier delivering value
for vehicle manufacturers and shareholders through businesses
including Halla Visteon Climate Control Corp., Visteon Electronics
and Visteon Interiors. Visteon designs, engineers and manufactures
innovative components and systems for virtually every vehicle
manufacturer worldwide. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; Visteon has facilities in 29
countries and employs about 24,000 people. Visteon had sales of
$7.4 billion in 2013. Learn more at
www.visteon.com.
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of
the world's leading private investment firms. Cerberus has more
than US $25 billion under management
invested in four primary strategies: distressed securities and
assets; control and non-control private equity; commercial
mid-market lending and real estate-related investments. From
its headquarters in New York City
and large network of affiliate and advisory offices in the U.S.,
Europe and Asia, Cerberus has the on-the-ground presence
to invest in multiple sectors, through multiple investment
strategies in countries around the world.