Visteon Surges 5% On $3.6 Billion HVCC Sale

Shares of Visteon Corp VC surged 5 percent Wednesday following an announcement that it will sell its approximately 70 percent ownership interest in Halla Visteon Climate Control Corp. (HVCC) for approximately $3.6 billion.

The buyer is an affiliate of Hahn & Company – a South Korea-based private equity company – and Hankook Tire Co. Ltd.

According to the press release, the transaction represents an enterprise value for HVCC of approximately 10.1 times EBITDA for the 12 months ended Sept. 30, 2014.

Visteon expected the ultimate tax exposure, after consideration of Visteon's tax attributes, to range between 10 percent and 14 percent as a function of final resolution of sovereign tax issues. The majority of proceeds have been hedged against currency movement.

Scott Hahn, CEO of Hahn & Co, said, "HVCC is Korea's largest and the world's second largest provider of thermal management solutions and will be an excellent fit within our existing portfolio and strategy. Customers of HVCC will continue to benefit from its globally renowned technology solutions, highly respected management team, strong balance sheet, dedication to innovation and expanding global market presence."

Visteon recently traded at $100.95. up 5.5 percent.