Visteon Corporation has reached an agreement to divest the majority of its automotive interiors business to Cerberus Capital Management. The transaction is expected to be completed by December 31, 2014.
Under terms of the agreement with Cerberus, Visteon will divest the interiors operations for nominal consideration and will contribute up to $95 million to the business. Cerberus will assume approximately $20 million of pension and other liabilities of the business, while Visteon will retain ownership of certain real estate and other assets in South America and Europe worth approximately $35 million.
Visteon has also 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.
“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,” said Dev Kapadia, a Cerberus managing director. “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.”
The automotive interior operations to be sold to Cerberus had revenues of approximately $1 billion in 2013 and produce a range of automotive interior products supplied to 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. In total, more than 4,000 manufacturing, engineering and administrative employees are part of the business involved in the transaction.
Cerberus Capital Management has approximately $25 billion of capital under management and invests in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. The firm was founded in 1992 and is headquartered in New York (www.cerberuscapital.com).
Visteon designs, engineers and manufactures components and systems for virtually every vehicle manufacturer worldwide. With corporate offices near Detroit in Van Buren Township, MI (US); 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 (www.visteon.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-5-14