GUELPH, ON, Oct. 15, 2015 /CNW/ - Linamar Corporation
(TSX:LNR) today announced its intention to file a Tender Offer for
100% of the outstanding shares and voting rights of Montupet S.A.
(EPA:MON), at €71.53 per share in cash, representing a premium of
15.5% compared to the closing price of Montupet shares as of
October 14th, 2015 and a
premium of 26.7% compared to the 30-day Volume Weighted Average
Price. The implied transaction value for 100% of Montupet is
approximately €771 million (or $1.16
billion Canadian at $1.50CAD per €). In
addition, Linamar would assume the net debt of Montupet, which was
€65 million as of June
30th, 2015. Montupet is a global leader in the
design and manufacture of complex aluminum castings for the global
automotive industry with sales and production facilities
diversified across several European countries, North America and Asia. The business combination represents a
significant milestone in Linamar's strategy to create global
leadership in the integrated casting and machining of aluminum
components for the automotive sector.
In addition, Linamar has entered into a Tender Offer Agreement
with Montupet S.A. pursuant to which Montupet, among other things,
has agreed to support Linamar's Tender Offer and not solicit other
bids.
Further, Montupet's senior managers and anchor shareholders, who
collectively own approximately 36.6% of Montupet's outstanding
shares, have individually entered into Undertaking to Tender
Agreements with Linamar pursuant to which they have agreed to
tender their shares to Linamar's Tender Offer. As part of
this, the senior managers and anchor shareholders have agreed to
remain with the company for at least one year after the acquisition
closes.
The filing of the Tender Offer with the Autorité des Marchés
Financiers ("AMF"), the French Regulatory Authority, is expected to
take place in November 2015 after the
board of directors of Montupet has issued its formal recommendation
on the offer following (i) the completion of the
information-consultation process of Montupet's central works
council and (ii) the issuance of the report of the independent
expert appointed by the board of directors of Montupet.
The Tender Offer is expected to open to the public in early
December 2015, pending approval by
the AMF, and is expected to close in February 2016. The Tender Offer is contingent
upon certain conditions being met, including receipt of antitrust
regulatory approval, which is expected to be achieved by year end,
and achieving an acceptance threshold of more than 50% of
Montupet's total outstanding shares and voting rights being
tendered to the Offer.
In the event that upon completion of the Tender Offer Linamar
holds at least 95% of the share capital and voting rights of
Montupet, Linamar has indicated its intention to implement a
squeeze-out of the outstanding shares and voting rights of
Montupet.
Montupet is a strong player in global automotive markets in
designing and manufacturing highly sophisticated aluminum castings
for a diversified customer base including numerous leading, global
OEMs. Montupet has expertise in low pressure die casting and
gravity die casting, both of which are standard processes for
high-integrity precision castings. It is a technological leader in
cylinder head manufacturing and also offers other key cast aluminum
products such as turbo charger components and steering
knuckles.
Linamar is a diversified full service manufacturer of precision
metallic components and systems for a variety of global markets
with a particular expertise in aluminum component machining such as
cylinder heads, blocks, transmission cases and housings and other
critical engine, transmission and driveline components and
sub-systems.
"We are thrilled to reach these agreements with Montupet and the
key shareholders of Montupet to support our Tender Offer," said
Linamar CEO Linda Hasenfratz.
"Montupet is a technical leader in the market, well-known and
respected for its engineering and processing expertise in the
cylinder head segment in particular where we intend to grow and
leverage our respective strengths. Our businesses are very
complementary, with our finished machining strength and Montupet's
casting expertise, and we are remarkably aligned in our business
philosophies, manufacturing discipline and employee dedication with
strong values and culture given our family business approach.
Together, we are poised for great success, as we can jointly offer
our customers one-stop shopping for collaboratively designed, cast,
fully machined and assembled cylinder heads and other light metal
cast products."
"Montupet and Linamar complement each other very well combining
leading expertise in casting and machining," stated Stéphane
Magnan, Chairman & CEO of Montupet. "Montupet has acquired a
global reputation with manufacturers which has resulted in strong
growth in sales supported by the company's very strong financial
position today. We want to choose the right partner to
continue this legacy. We strongly believe Linamar, with its
global footprint, strong values, diverse process capabilities, and
automotive manufacturer relationships is a good choice to lead
Montupet's growth and success in the long term. Linamar's offer is
thus attractive for our business."
Linamar has financing commitments in place for up to 100% of the
cash purchase price. These financing commitments provide Linamar
the ability to fund in multiple currencies including Euro and have
been fully underwritten by the Bank of Montreal and BMO Capital Markets,
Toronto-Dominion Bank, and Bank of Nova
Scotia under terms and conditions largely consistent with
Linamar's current syndicated credit facility. The pro forma
leverage is prudent and well within Linamar's target leverage
parameters with pro forma cash flow expected to allow for
significant debt repayment going forward. The acquisition is
expected to be earnings accretive to Linamar's earnings per
share.
The undertakings to tender entered into by Montupet's anchor
shareholders are revocable in the event of a competing bid, except
in case of an increased offer by Linamar. Each of the anchor
shareholders has agreed to pay to Linamar a portion of the gain
realized if he tenders his shares to another
offer.
Linamar and Montupet will hold a joint conference call on
October 15th, 2015 at 9:00 a.m. EDT / 3:00 p.m.
CET, with remarks in English and French, to discuss this
press release. The numbers for the call are 1-866-907-5923
(United States), 1-855-301-2434
(Canada), and 0-805119320
(France) using participant code
number 126694#, with a call-in required 10 minutes prior to the
start of the conference call. The conference call will be chaired
by Linda Hasenfratz, Linamar's Chief
Executive Officer and Stéphane Magnan, Chairman and Chief Executive
Officer of Montupet.
A copy of this press release will be available on Linamar's
website after 7:00 a.m. EDT on
October 15th, 2015, at www.sedar.com
by the start of business on October 16th,
2015, and on Montupet's website. A taped replay of the
conference call will also be made available starting at
12:00 p.m. EDT and 6:00 p.m. CET on October
15th, 2015 for 90 days. The numbers for replay
are 1-877-642-3018 (United States
& Canada) and 33-0-172001500
(France) using conference ID
296959#.
Linamar Corporation (TSX:LNR) is a diversified global
manufacturing Company of highly engineered products powering
vehicles, motion, work and lives. The Company is made up of 2
operating segments – the Powertrain/Driveline segment and the
Industrial segment, which are further divided into 4 operating
groups – Machining & Assembly, Light Metal Casting, Forging,
and Skyjack, all world leaders in the design, development and
production of highly engineered products. The Company's Machining
and Assembly, Casting and Forging operating groups focus on
precision metallic components, modules and systems for engine,
transmission and driveline systems & structural components
designed for global vehicle and industrial markets. The Company's
Skyjack operating group is noted for its innovative, high quality
mobile industrial equipment, notably its class-leading aerial work
platforms and telehandlers. With more than 19,500 employees in 48
manufacturing locations, 5 R&D centers and 15 sales offices in
14 countries in North and South
America, Europe and
Asia, Linamar generated sales of
$4.2 billion in 2014. For more
information about Linamar Corporation and its industry leading
products and services, visit www.linamar.com.
Forward Looking Information, Risk and Uncertainties
Certain information provided by Linamar in this press release
and other documents published throughout the year which are not
recitation of historical facts may constitute forward-looking
statements. The words "may", "would", "could", "will", "likely",
"estimate", "believe", "expect", "plan", "forecast" and similar
expressions are intended to identify forward-looking statements.
Readers are cautioned that such statements are only predictions and
the actual events or results may differ materially. In evaluating
such forward-looking statements, readers should specifically
consider the various factors that could cause actual events or
results to differ materially from those indicated by such
forward-looking statements.
Such forward-looking information (including satisfaction of the
Tender Offer conditions, the expected timing of the consummation of
the Tender Offer, the estimated total transaction value, and
certain strategic and financial benefits and operational
efficiencies expected to result from the consummation of the Tender
Offer) may involve important risks and uncertainties that could
materially alter results in the future from those expressed or
implied in any forward-looking statements made by, or on behalf of,
Linamar. Some of the factors and risks and uncertainties that could
cause results to differ from current expectations include, but are
not limited to, the ability of Linamar to satisfy the conditions of
the Tender Offer, to successfully take up and pay for shares and
voting rights tendered to the Tender Offer and to complete any
subsequent squeeze out transaction, compliance by the signatories
with the terms of the Tender Offer Agreement and the Undertaking to
Tender Agreements, completion of Linamar's financing of the Tender
Offer, changes in the various economies in which Linamar and
Montupet operate, fluctuations in interest rates, environmental
emission and safety regulations, the extent of OEM outsourcing,
industry cyclicality, trade and labour disruptions, world political
events, pricing concessions and cost absorptions, delays in program
launches, Linamar's dependence on certain engine and transmission
programs and major OEM customers, currency exposure, technological
developments by Linamar's and Montupet's competitors, governmental,
environmental and regulatory policies and changes in the
competitive environment in which Linamar and Montupet operate.
The financial and operating performance of Linamar and its
reportable operating segments and the timing and terms upon which
the Tender Offer may be consummated, if at all, may be affected by
a number of factors. Many of these risk factors and other
assumptions related to Linamar's forward-looking statements and
information are or will be discussed in further detail throughout
the Tender Offer documents and in Linamar's continuous disclosure
materials on file with Canadian securities commissions
at www.sedar.com, and readers should refer to such risk
factors and other statements in evaluating the forward-looking
statements contained in this news release.
The foregoing is not an exhaustive list of the factors that may
affect Linamar's forwarding looking statements. These and other
factors should be considered carefully and readers should not place
undue reliance on Linamar's forward-looking statements. Linamar
assumes no obligation to update the forward-looking statements, or
to update the reasons why actual results could differ from those
reflected in the forward-looking statements.
In accordance with French law, the draft documentation relating
to the Tender Offer on Montupet, if filed, will include the terms
and conditions of the Offer and will be subject to review by the
AMF. The offer will only be opened after the AMF has granted its
clearance (décision de conformité). The information related to
Montupet and provided in this press release is based on public
sources.
SOURCE Linamar Corporation