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March 4, 2019

Tower completes Europe ops sale to SNOP

Tower International has completed the sale of all of its European Operations to Financière SNOP Dunois (FSD), a privately-owned French automotive supplier. 

By Rhodri Morgan

Tower International has completed the sale of all of its European Operations to Financière SNOP Dunois (FSD), a privately-owned French automotive supplier. 

The purchase price has an Enterprise Value of EUR255m (US$289m) which represents an EV / Adjusted EBITDA multiple of 5.4x 2018 full year earnings.

“We are pleased to have completed the divestiture of Tower’s European operations at a valuation well above our current trading multiple,” said Tower CEO, Jim Gouin.

“The divestiture reduces Tower’s net leverage to less than 1 times Adjusted EBITDA, giving Tower the flexibility to continue to profitably grow our business, maintain a conservative balance sheet and continue to return of capital to our shareholders.”

The divestiture resulted in net cash proceeds of approximately US$250m after payment of transaction costs and fees and the unwinding of the Euro denominated swaps related to Tower’s Term Loan. 

Following the closure of the transaction, Tower repaid US$50m of outstanding Term Loan B indebtedness.  This repayment, coupled with Tower’s voluntary reduction to the Term Loan in July 2018 represent repayments totalling US$100m.

“Since 2014, Tower’s North American business has grown by more than 40% in a relatively flat production environment as we have benefited from the industry’s shift from passenger cars to trucks and SUVs as well as OEM outsourcing,” added Gouin.

“Tower is well positioned to continue to benefit from these trends and current projections for full-year 2020 represent continued above market revenue growth, improved Adjusted EBITDA margins and significant free cash flow.” 

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