VAN BUREN TOWNSHIP, Mich.—Automotive supplier Visteon Corp. has agreed to sell its ownership stake in a South Korean supplier of automotive climate control systems to an investor consortium that includes Hankook Tire Co. Ltd.
Van Buren Township-based Visteon said the deal for its approximate 70-percent stake in Halla Visteon Climate Control Corp. (HVCC) with an affiliate of Hahn & Co.—a South Korea-based private equity company—and Hankook Tire Co. Ltd. is valued at about $3.6 billion.
The agreement calls for Hahn & Co. to own a 50.5-percent stake in HVCC and Hankook a 19.49-percent share, which would value Hankook's investment at about $100 million.
The transaction, which is subject to regulatory reviews, shareholder approval and other conditions, is expected to be completed in the first half of 2015.
In a prepared statement, Hankook said it expects its decision to invest in HVCC to generate “synergistic opportunities” that will contribute to the tire maker's “continued commitment” to growth.
In its statement, Hankook said it based its decision to invest in HVCC on the supplier's “stable operating and financial performance” and its global portfolio in the auto industry.
“This significant investment demonstrates Hankook Tire's continued commitment to growth and to increase its competitiveness worldwide” said Seung Hwa Suh, vice chairman and CEO of Hankook Tire.
“We expect to further contribute to global automakers with combined market position and fostering strong synergy.”
Hahn & Co. CEO Scott Hahn described the acquisition as an “excellent fit within our existing portfolio and strategy. Customers of HVCC will continue to benefit from its globally renowned technology solutions, highly respected management team, strong balance sheet, dedication to innovation and expanding global market presence.
“Together in partnership with Hankook Tire, we believe we can help HVCC expand its customer base and global reach and further improve upon HVCC's operating efficiency and technological expertise. Both of our firms are confident that the current management team of HVCC will continue to deliver excellence to its customers, its employees and to its shareholders.”
HVCC is described as a full-line supplier of automotive thermal management solutions. Its products include heating ventilation and air conditioning; compressors; powertrain cooling; fluid transport; and electric, hybrid and fuel-cell vehicle thermal systems.
The company maintains 36 manufacturing sites and four global technical centers in 19 countries; employment is about 15,500.
The transaction represents an enterprise value for HVCC of approximately 10.1 times EBITDA for the 12 months ended Sept. 30, 2014, Visteon said. HVCC is traded on the Korea Stock Exchange.
Visteon said its management will provide greater details on the transaction on Jan. 13, 2015, at the Deutsche Bank 2015 Global Auto Industry Conference in Detroit.