Tower Sells Korean Operations for $47M Cash, $98M in Assumed Debt
Tower International (NYSE: TOWR) today announced that it sold its Korean operations in order to strengthen its overall business and realize shareholder value.
Under the agreement reached earlier today, Tower sold 100% of the stock in its wholly-owned Korean subsidiary to SECO, a privately owned Korean auto parts supplier. The sold operations include 5 manufacturing plants, a tooling plant, and a headquarters/technical center. Financial results for full year 2012 were projected at revenue of $345 million, Adjusted EBITDA of $25 million, and free cash flow of negative $5 million.
Tower will receive an estimated $47 million in cash (50% at closing, 40% January 2013, 10% December 2013), and the buyer will assume net debt that averaged $98 million for the last twelve months through November, representing a transaction enterprise value of approximately $145 million or 5.8 times projected 2012 Adjusted EBITDA. This transaction multiple is significantly higher than the present multiple for Tower's common stock, which Tower estimates at approximately 3.4 times based on yesterday's closing price.
The transaction also represents significant balance sheet strengthening and de-risking for Tower. On a pro-forma basis