Metaldyne Closes Transaction to be Acquired by Asahi Tec
Deal Creates a New Paradigm for the Auto Industry
PLYMOUTH, Mich., Jan. 11 -- Metaldyne Corporation, a leading global supplier of powertrain and chassis systems and components, said today its previously announced acquisition by Asahi Tec Corporation has been completed. Asahi Tec is a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments.
The total value of the transaction is approximately USD $1.2 billion, including assumption of Metaldyne's debt but excluding consent fees for the existing bonds and Asahi Tec transaction expenses. Asahi Tec's major investors following the transaction include Asahi Tec's major shareholder RHJ International SA (RHJI) and RHJI's co-investors, Mitsui & Co., Ltd. and Chuo Mitsui Growth Capital Investment Limited Partnership II as well as Metaldyne's largest stockholder, Heartland Industrial Partners, L.P.
As part of the transaction Asahi Tec is investing $205 million of equity in Metaldyne and Metaldyne's existing credit and receivables facilities are being refinanced with new credit facilities of $670 million, comprised of a $150 million revolving credit facility, a $60 million synthetic letter of credit facility and a $460 million term loan facility of which $25 million will be available on a delayed draw basis after the merger. The $205 million of equity investment is $5 million higher than originally disclosed to cover higher expenses associated with the transaction.
In connection with the transaction approximately 97 percent of Metaldyne's equity holders agreed to reinvest their proceeds in new Asahi Tec common equity. The remaining 3 percent of Metaldyne's shareholders will receive $2.57 in cash for each Metaldyne share. In addition, Metaldyne effected the previously announced distribution of the common stock of TriMas Corporation owned by it to the holders of the common stock equivalents of Metaldyne as of the business day prior to the merger.
"Globalization has changed the world," said Tim Leuliette, co-chairman and co-CEO of Asahi Tec and chairman and CEO of Metaldyne. "Metaldyne and Asahi Tec have responded by creating a new paradigm for the auto industry. We have combined to form a strong, globally competitive company that understands and supports global markets, cultures and customers and delivers leading-edge products worldwide."
The transaction expands Metaldyne and Asahi Tec's geographic footprint and product portfolio and positions both companies to benefit from customer growth in Asia as well as in North America and Europe.
"We are very pleased with this merger," said Shoichiro Irimajiri, co- chairman of Asahi Tec. "Together our companies will be stronger, better capitalized and more globally competitive, which will help us better serve our customers, employees, investors and suppliers."
This acquisition is expected to:
* Diversify the customer base and expand the global footprint
* Create a strong, experienced combined Asahi Tec and Metaldyne management
team
* Enhance engineering capabilities and technology leadership in powertrain
and chassis
* Expand R&D capabilities
* Broaden manufacturing capabilities, including aluminum castings, ductile
iron castings, powdered metals and precision machining
* Strengthen the product portfolio
* Reduce costs through joint procurement
* Improve facility utilization
* Expand the market opportunity for light vehicles (Metaldyne) and heavy
trucks (Asahi Tec)
Metaldyne will operate as a subsidiary of Asahi Tec and keep its name. Leuliette continues as chairman and CEO of Metaldyne. He also serves as co- chairman of Asahi Tec with Irimajiri and becomes co-CEO with Akira Nakamura, who continues in his role as president of Asahi Tec. In addition, Leuliette joins Irimajiri as an industrial partner in RHJI.
"The business and financial success of this merger will be driven by a strong management team and the collective strength of our employees who are empowered to bring innovative ideas forward," said Leuliette.
For more information about the Metaldyne and Asahi Tec transaction, please visit http://www.metaldyne.com/metaldyne/sections/newsroom/asahi_tec.aspx.
About Asahi Tec
Headquartered in Shizuoka, Japan, Asahi Tec primarily designs, manufactures and sells ductile iron cast auto parts for truck and construction machinery OEMs, aluminum casting parts for truck and passenger car OEMs and aluminum wheels for automobile OEMs. Asahi Tec also designs, manufactures and sells environmental systems, equipment and development technologies used by local governments and municipalities and electrical hardware and equipment used by electricity generators. The company employs more than 3,500 employees at facilities in Japan, Thailand and China.
About RHJ International
RHJ International SA (Euronext: RHJI) is a limited liability company organized under the laws of Belgium, having its registered office at Avenue Louise 326, 1050 Bruxelles (Belgium). It is a diversified holding company focused on creating long-term value for its shareholders by acquiring and operating businesses in attractive industries in Japan and elsewhere.
About Metaldyne
Metaldyne is a leading global designer and supplier of metal-based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel-end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry.
Headquartered in Plymouth, Mich., Metaldyne has annual revenues of approximately $1.9 billion. The company employs more than 6,500 employees at 38 facilities in 14 countries.
For more information, please visit www.Metaldyne.com Cautionary Information regarding Forward-Looking Statements
Statements in this press release regarding the proposed transaction which are not historical facts are "forward-looking" statements, as that term is defined by the federal securities laws. Forward-looking statements include certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with Metaldyne's outlook concerning future results, based on information available at the time of this press release. All forward-looking statements are inherently uncertain as they are based upon various expectations and assumptions concerning future events, and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements, and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.
Important factors upon which the forward-looking statements presented in this press release are premised include: (a) timely implementation and execution of merger related plans including integration plans; (b) retention of customers and critical employees; and (c) successful management of any impact from declines in North American automobile and light truck builds. In addition, the ability of Metaldyne to achieve the expected results with Asahi Tec also will be affected by the effects of competition (in particular the response to the proposed transaction in the marketplace), the effects of general economic and other factors beyond the control of Metaldyne, and other risks and uncertainties that have been described from time to time in Metaldyne's public filings with the Securities and Exchange Commission, as further identified below.
Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this press release include general economic conditions in the markets in which we operate and industry-based factors such as: declines in North American automobile and light truck builds, reductions in outsourcing by our automotive customers, increases in our raw material and energy costs, labor costs and strikes at our major direct and indirect customers and at our facilities, dependence on significant automotive customers, the level of competition in the automotive supply industry and pricing pressures from our customers, technological developments that could competitively disadvantage us, and risks associated with conducting business in foreign countries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this report such as substantial leverage, limitations imposed by our debt instruments, the adequacy of our liquidity to meet our capital expenditures and other cash requirements, our ability to identify attractive and other strategic opportunities and to successfully achieve the intended benefits of the merger with Asahi Tec and integrate acquired businesses including actions we have identified as providing cost-saving opportunities.
We do not undertake any obligation to review or confirm analysts' expectations or estimates or to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.