Metal and parts supplier Tahoe International and private equity-owned company Autokiniton Global Group (AGG) jointly announced on Friday (July 12) that Tahoe agreed to sell to AGG for $ 900 million. The acquisition is expected to be completed in September or October.
Last May, New York-based KPS Capital Partners and former Metaldyne Performance Group CEO George Thanopoulos founded Autokiniton to form a new auto parts supplier. Autokiniton subsequently acquired metal stamping company L & W. It is expected that the company will make more acquisitions subsequently.
Autokiniton agreed to acquire all of TAO's issued shares at a cash price of $ 31 per share, which is equivalent to 70% higher than the price at the time of TAO's closing on Thursday (July 11). It is reported that the transaction price of 900 million US dollars includes Tao's debt and pension-related debt. Excluding the debt and pension liabilities that need to be assumed, based on the number of shares issued by Taowo, the delivery price is $ 641 million.
Tahoe's annual 10-K report to US regulators shows that 47% of Tahoe's business comes from Ford. 22% of revenue comes from FCA, while the other 12% comes from Nissan. In addition, it also does business with Toyota, BMW, Volkswagen Group and Honda.
Tahoe has also faced many bumps in the past few years, including bankruptcy. In 2005, due to rising steel prices, the company applied for Chapter 11 protection under the Federal Bankruptcy Law, but in 2007, under the leadership of private equity mogul Cerberus Capital Management, the company began development of. But then, in the IPO process, Bolong sold Tao shares for $ 81.3 million, which was 11% lower than the price it had when it acquired Tao.
To shift its focus to the North American market, Tahoe sold its European operations in early 2019. Company spokesman Derek Fiebig revealed that the European business was sold because Tahoe found it difficult to achieve growth in the European region. In the first quarter of this year, Tao's net loss reached $ 5.1 million, or 24 cents per share, while its net income for the same period last year was $ 17.3 million, or 83 cents per share. Tahoe said that revenue from continuing operations in the first quarter was $ 7.7 million, compared to $ 16.5 million in the same period last year. Operating income for the first quarter was $ 379 million, down 6.9%.
Tahoe announced in June that it will consolidate senior management positions and will reduce its leadership team, including the dismissal of Pär Malmhagen, president due to the sale of its European operations, and early retirement of chief operating officer Mike Rajkovic.
Taowo CEO and President Jim Gouin praised Autokiniton's acquisition in a Friday press release, saying Taowa shareholders can immediately enjoy the benefits of a stock price premium, while Taowa and AGG's product lineup and expanded production footprint It will also benefit consumers. Jim Gouin said: "After the merger, Tao employees will also benefit from it. With the comprehensive production plant and lightweight technology, the combined company will be more competitive in the North American market, which will drive its profits. Get continuous growth. "
The transaction includes a 35-day period, during which time the board and consultants of Tall may seek other acquisition intentions and may terminate the transaction if they find a better buyer.
Tahoe is located in Livonia, Michigan and employs approximately 5,700 people. As of March, KPS Capital controlled approximately $ 5 billion in assets through subsidiaries. In addition, Autokiniton is headquartered in the New Boston area of Michigan.
It is reported that in this transaction, J.P. Morgan Securities LLC (J.P. Morgan Securities LLC) served as the financial adviser to Tahoe. HoulihanLokey Capital Inc provided fair advice and Lowenstein Sandler LLP acted as legal counsel to Tahoe. Goldman Sachs Investment Corporation and Bank of America Merrill Lynch acted as Autokiniton financial advisers in this transaction, while their legal advisers were Paul, Weiss, Rifkind, and Wharton & Garrison LLP.