Horizon Global Corporation has announced it has entered into a definitive merger agreement with First Brands Group, LLC, a global automotive parts manufacturer that serves the worldwide automotive aftermarket, pursuant to which First Brands will acquire Horizon Global. The terms of the transaction include an all-cash tender offer, which upon successful closing will entitle each stockholder of Horizon Global’s common stock to receive cash consideration of $1.75 per share.
Highlights of the transaction:
- The transaction will result in a collection of brands within the automotive industry, serving both OEM and the aftermarket channels under one group. Horizon Global’s portfolio of pioneering towing and trailering brands and innovative products are complementary to First Brand’s well recognized portfolio of braking solutions, filters, wiper blades, gas springs, spark plugs and fuel and water pumps, offering best-in-class technology, engineering, manufacturing and customer service.
- The combined group will have improved access to capital to ensure the continued growth and product development that has been a long-term strategic priority for Horizon Global, enabling the group to focus on serving its broad customer base without interruption.
- Despite the difficult market backdrop, the transaction represents a 31% premium to the trading price prior to the strategic alternative announcement in August 2022, and a 237% premium over the 30 day volume weighted trading price in Horizon Global’s common stock.
“The transaction represents the culmination of a thorough review of strategic alternatives announced in August and represents what we believe is the best outcome for our customers, suppliers, shareholders and employees,” said Horizon Global’s interim CEO and board chair, John C. Kennedy. “After consideration of a number of different alternatives, the Board believes this transaction is the best path forward for shareholders to address Horizon Global’s capital needs while supporting the long-term growth and sustainability of Horizon Global’s business. Our management team and employees of Horizon Global are committed to delivering innovative, high-quality towing and trailering products, and this transaction provides the resources needed to deliver on that commitment.”
“We are pleased to welcome Horizon Global to the First Brands family, we are excited to build on Horizon Global’s established products, brands and customers and we look forward to realizing benefits for both Horizon Global and First Brands as we move forward,” stated Guy Andrysick, executive vice president, First Brands.
The closing of the transaction is subject to certain conditions, including the tender of shares representing at least a majority of the total number of Horizon Global’s outstanding shares of common stock, the tender of Series B preferred stock at a cash consideration equal to the applicable redemption price and other customary conditions. Other than filings with the SEC, no regulatory filings or approvals are anticipated in connection with the transaction. Horizon Global expects the transaction to be completed in the first quarter of 2023.
Jefferies LLC acted as financial advisor and Lincoln International LLC provided a Fairness Opinion to Horizon Global, and Jones Day acted as legal counsel to Horizon Global. Paul Hastings LLP acted as legal counsel to First Brands.