Insilco Holding Co. Realigns Business to Accelerate Growth
21 July 2000
Company Signs Agreements to Divest Automotive Businesses and to Purchase Precision Cable Manufacturing Corporation
COLUMBUS, Ohio - Insilco Holding Co. today announced a strategic
repositioning that will intensify the Company's focus on its high-growth
technology related businesses, while improving its overall financial flexibility.
The Company said that it has signed a definitive agreement with ThermaSys
Holding Company, which is owned and controlled by Insilco's majority
shareholders, DLJ Merchant Banking Partners II, LP and Citicorp Venture Capital,
Ltd. to sell to ThermaSys the assets of its automotive businesses, including
Thermalex, its 50% owned joint venture, for cash proceeds of $147.0 million,
subject to closing adjustments. At the closing, the Company will sign an
agreement to provide certain management services to ThermaSys. Insilco's
automotive businesses reported 1999 sales of $228.3 million and EBITDA of $32.6
million, net of normalized Thermalex cash dividends and corporate overhead
allocations.
The transaction was negotiated on behalf of the Company, and approved by a
special committee of the Company's Board of Directors comprised of the
Company's independent director. The Special Committee received an opinion from
McDonald Investments Inc., a KeyCorp Company, that the consideration to be
received by the Company is fair from a financial point of view.
The Company said the transaction, which is expected to close in the third
quarter, is subject to the expiration of the applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, closing on a
commitment for financing, and other customary terms and conditions. Proceeds
from the transaction will be used to reduce bank debt and to gain financial
flexibility to execute the Company's acquisition strategy, including the
acquisition of Precision Cable Manufacturing.
The Company also said that it has signed a definitive agreement to acquire
Precision Cable Manufacturing Corporation ("PCM"), a Rockwall, Texas based
provider of cable and wire assemblies to Original Equipment Manufacturers
serving the rapidly growing Digital Subscriber Line segments of the
telecommunications industry. The transaction, which is expected to close in
the third quarter, is subject to the applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, closing on a commitment for
financing, and other customary terms and conditions. Financial terms of the
transaction were not disclosed.
David A. Kauer, Insilco President and CEO commented, "The sale of our
automotive businesses will allow us to unleash the value of our fast-growing
technology-related businesses and restructure our existing senior debt to give
us more flexibility to respond quickly to market opportunities. For the first
half of this year, we expect our technologies businesses to post pro forma
sales growth in excess of 38%. Moreover, we continue to see numerous
opportunities to grow sales and margin for the technologies businesses, both
through internal actions as well as acquisitions."
Kauer continued, "We are particularly excited with the acquisition of PCM.
While PCM had sales of $43.5 million for its most recent fiscal year, the
company has existing manufacturing capacity in low-cost labor centers to meet
the growing demand from the telecommunications market and, as a result, nearly
doubled its sales in the current quarter to $16.3 million compared to a year
ago. While further strengthening our existing cable and wire assembly
business, PCM also broadens our telecommunications customer base and provides
us with close proximity to some of the fastest growing telecommunications OEMs
in Southwest."
Insilco Holding Co., based in suburban Columbus, Ohio, is a diversified
manufacturer of industrial components. The Company's business units serve the
telecommunications, electronics, automotive and other industrial markets. The
Company had 1999 consolidated revenues in excess of $476 million.