Dec. 28, 2012
/PRNewswire/ -- Tower International, Inc. [NYSE:TOWR], a leading integrated global manufacturer of engineered structural metal components and assemblies, 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
, Adjusted EBITDA of
, and free cash flow of negative
Tower will receive an estimated
in cash (50% at closing, 40%
), and the buyer will assume net debt that averaged
for the last twelve months through November, representing a transaction enterprise value of approximately
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 excluding Korea, Tower's average net debt for the last four quarters through
September 30, 2012
would be reduced by
"This is a very positive transaction on many fronts," said Tower President and CEO
. "We believe it provides significant immediate value to shareholders, plus it makes Tower a stronger company going forward. We also are confident that the new owner will provide a bright future and good opportunities for our loyal and dedicated former colleagues."
Tower was assisted in this transaction by Rothschild, Samsung Securities, and Kim & Chang.