SACRAMENTO, CA — GenCorp has signed a definitive agreement to sell its GDX Automotive business (GDX) to Cerberus Capital Management, L.P., a New York based investment firm. GDX makes rubber seals for the automotive industry.
GenCorp will receive $147 million in cash for the business, on a debt-free cash-free basis. The sale is expected to close during the company’s fourth quarter, which ends on November 30.
GenCorp announced last week that it had classified GDX as a discontinued operation as of the second quarter of 2004. The company recorded a one-time charge in that quarter of $261 million to reflect the estimated disposition value.
According to one published report GenCorp. stock fell nearly 12 percent on Friday. GenCorp.stock fell $1.52 to $11.49 on the New York Stock Exchange.
GenCorp’s board of directors has decided to eliminate its quarterly dividend. The company said it will redirect the funds it previously used for dividends towards investment in its core businesses.
Terry Hall, chairman, president and CEO of GenCorp, said the sale is a major step into the company’s efforts to become a more focused entity. Assets from the sale will be invested into the company’s aerospace and defense and real estate operations, where Hall said the company believes it can achieve higher returns and growth.
Deutsche Bank Securities Inc. acted as a financial advisor to GenCorp Inc. on the sale of its GDX Automotive business.
For more information about GenCorp, go to: www.GenCorp.com.
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