Horizon Global Corp., one of the world’s leading manufacturers of branded towing and trailering equipment, has entered into a definitive agreement to sell its Asia-Pacific (APAC) business segment to Pacific Equity Partners (PEP) for AUD $340 million in cash, subject to customary closing adjustments.
The company said it intends to use the proceeds from the sale to significantly reduce its debt and bolster its liquidity, allowing for additional financial flexibility.
Upon completion of the sale and subsequent retirement of debt, Horizon Global intends to pursue a full or partial refinancing of its remaining secured debt. If successful, it is expected that this refinancing would close in the fourth quarter of 2019.
Carl Bizon, president and CEO of Horizon Global, commented, “We are pleased with the outcome of the sale process. While the proceeds from this sale will allow us to satisfy the $100 million prepayment obligation under our First Lien Term Loan, we expect to make additional debt repayments substantially in excess of this amount. This transaction also simplifies our operating structure, allowing us to deepen our focus on our remaining operating segments, which we believe can be restored to historical profitability levels.
“We would like to thank our dedicated APAC team as it worked tirelessly throughout the process to continue to service our customers and perform to the standards to which they are accustomed. Our APAC business segment is an exceptional business with strong leadership positions in the markets it serves. We believe the business will continue to thrive and serve its customers as they have come to expect, making the business a valued part of PEP’s portfolio.”
Andrew Charlier, a managing director of PEP, added, “APAC is led by an outstanding management team and has a track record of developing innovative products and solutions for its customers. We are excited to support management by investing in product development, geographical expansion, and the potential acquisition of additional brands in order to continue to deliver quality products and service to our customers.”
The transaction is subject to the satisfaction of customary closing conditions and is expected to close before the end of the third quarter of 2019.
Jefferies LLC is serving as financial adviser to Horizon Global in the transaction.