TROY, MI — ArvinMeritor today announced that it plans to divest its Light Vehicle Aftermarket (LVA) business group and to take a non-cash goodwill impairment charge of $190 million, or $2.77 per diluted share, in its LVA business in the fiscal fourth quarter of 2004.
The company also announced plans to divest its Roll Coater coil coating business, a wholly owned subsidiary of ArvinMeritor.
ArvinMeritor’s LVA business group supplies exhaust systems, filters, and ride control and motion control products to retailers, distributors and all major car companies around the world. LVA posted more than $0.8 billion in sales during fiscal year 2003, and employs approximately 5,000 people at 21 facilities in seven countries.
Roll Coater Inc. is a leading provider of automated, high-speed coil coating services and other value-added metal processing services to a diverse customer base, including the transportation, appliance, HVAC, construction, lighting and other industries. The business, which is headquartered in Indianapolis, posted approximately $0.2 billion in sales during fiscal year 2003 and employs approximately 500 people at four facilities in the U.S.
ArvinMeritor Chairman, CEO and President Charles “Chip” McClure said in a written statement that the divestitures are designed to sharpen ArvinMeritor’s focus on supporting its growing list of global Light Vehicle Systems (LVS) original equipment manufacturing (OEM) customers and its Commercial Vehicle Systems (CVS) OEM and aftermarket customers.
“These divestitures will enable ArvinMeritor to leverage our core competencies in the global automotive and commercial truck markets to provide the innovative solutions that give our OE customers a competitive edge,” said McClure. “By concentrating our resources — and longstanding engineering and design expertise — on our core competencies, we will continue to generate even more value for our customers and our shareowners.
“LVA has earned a strong reputation for providing some of the world’s best-known brands to a diverse and global customer base,” McClure added. “In order for LVA to reach its full potential and succeed in the future, however, it needs to move forward under new owners whose strategic priorities include building critical mass in the business and providing it with product development and brand support.”
Lehman Brothers has been retained as an advisor for the LVA sale process.
ArvinMeritor will report the LVA and coil coating businesses as discontinued operations when it reports its fourth quarter earnings on Nov. 15.
“We believe these decisions are necessary steps to improve our financial flexibility and strengthen our long-term profitability,” said McClure.
The company said it plans to use the proceeds of the sales of the LVA and coil coating businesses to strengthen the balance sheet and selectively reinvest in ArvinMeritor’s core LVS and CVS business segments. The company expects to complete the divestitures during the 2005 fiscal year.
For more information, visit the company’s Web site at: www.arvinmeritor.com.
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