Accuride has announced two important actions that will enable the company to focus completely on the strategic vision to be the premier supplier of wheel-end system solutions to the global commercial vehicle industry, the company says.
Accuride has entered into a definitive agreement to be acquired by Crestview Partners, a leading New York based private equity firm, for $2.58 per share in cash. It is expected that the transaction process will result in a sale closing during the fourth quarter of 2016, following approval by Accuride shareholders and completion of customary regulatory reviews. Afterwards, Accuride will operate as an independent business within Crestview’s portfolio of companies.
The purchase price represents a premium of 55 percent over Accuride’s closing share price on Sept. 1, 2016, and a premium of 66 percent over the 30-day volume weighted average price as of the same date.
Accuride’s board of directors unanimously approved the Crestview transaction and agreed to recommend that Accuride’s shareholders vote to adopt the merger agreement. In addition, investment funds affiliated with Cetus Capital LLC, who collectively hold approximately 17 percent of the outstanding Accuride shares, have entered into a customary voting agreement to support the Crestview transaction.
The merger agreement contains a customary 35 calendar day “go shop” period during which Accuride and its advisors are permitted to solicit alternative transaction proposals.
After the transaction closes, Accuride will remain an independent global company with continuity of leadership, business units and worldwide operations. It will continue to operate under its current brand name and remain headquartered in Evansville, Ind., with operations in the United States, Canada, Mexico and Italy.
“Accuride is excited to have this opportunity to partner with Crestview, a private equity firm respected for its integrity and expertise in managing assets, and well regarded for enhancing the value of its holdings,” says Accuride President and CEO Rick Dauch.
“After the transaction closes, Accuride will operate as a stand-alone business within Crestview’s portfolio of companies. Accuride will serve as a platform for further growth and consolidation in the global wheels and wheel-end sectors as we expand to serve our customers’ needs worldwide. We are confident that under Crestview’s stewardship, Accuride will receive the resources and support needed to realize our vision of becoming the premier supplier of wheel end system solutions to the global commercial vehicle industry.”
“We are thrilled to have the opportunity to partner with Rick Dauch and the rest of Accuride’s terrific management team to help take Accuride to the next level,” says Alex Rose, partner at Crestview and co-head of the firm’s industrials strategy.
“This acquisition results in a de-levered Accuride, providing the company with greater flexibility to pursue growth around the world. Crestview has had great success backing strong industrial companies that are embarking upon global expansion strategies and we look forward to helping Accuride’s management team execute on their vision for the company’s future.”
In addition, Accuride has sold Brillion Iron Works to a subsidiary of Metaldyne Performance Group Inc., a provider of highly-engineered components for use in powertrain and suspension applications for the global light, commercial and industrial vehicle markets.
Under the purchase agreement, MPG has acquired from Accuride all of the stock of Brillion Iron Works, Inc. for total cash consideration of $14 million.
“Today’s action will enable Accuride to focus completely on our strategic vision to be the premier supplier of wheel-end system solutions to the global commercial vehicle industry,” Dauch says.