October 16, 2009
New Powertrain-Focused Metaldyne Formed by Sale to MD Investors
Plymouth Mich. – October 16, 2009 – Metaldyne Corporation announced today it has completed the sale of substantially all of its assets to MD Investors Corporation.
MD Investors purchased certain assets related to Metaldyne’s Sintered Products, Vibration Controls Products, European Forging Products and Powertrain Products Groups, including its balance shaft module, driveline machining and assembly, and tubular products operations. In addition, certain chassisrelated assets were acquired.
The purchase was made under a court supervised 363 auction process. MD Investors paid approximately $40 million in cash subject to adjustments under the asset purchase agreement, plus the assumption of certain debt and liabilities, and credit bid more than $425 million of secured term debt. The new company will operate under the name Metaldyne, LLC.
“These Metaldyne operations have solid product portfolios, advanced technologies, and an experienced workforce,” said Shary Moalemzadeh of MD Investors. “We have created a powertrain-focused company that will be a stable supplier to the global automotive industry, which we believe will benefit Metaldyne’s customers and other stakeholders.”
MD Investors was formed by a group of Metaldyne’s existing term lenders led by The Carlyle Group, one of the largest global private equity firms with just over $85 billion of assets under management, and Solus Alternative Asset Management LP, a SEC-registered investment advisor.
The sale process began in connection with Metaldyne and its U.S. subsidiaries filing for protection under Chapter 11 of the U.S. Bankruptcy Code on May 27, 2009. Under U.S. bankruptcy law, a 363 sale allows a sale of assets on a going concern basis prior to confirmation of a plan of reorganization where a good business reason exists.
“The sale of our best performing businesses was the foundation of our restructuring goals for Metaldyne’s operations through the Chapter 11 process, and I am very pleased with the leadership MD Investors exhibited to bring this transaction to closure,” said Thomas A. Amato, chairman, president and CEO of Metaldyne, LLC. “The strong support of our customers globally is a testament to the technology of our products and processes, and the dedication of our employees. On behalf of all of the employees of the new Metaldyne we look forward to a fresh start and new beginning.”
The following operations are included in the sale:
- Metaldyne’s Sintered Products operations, including North Vernon Indiana;
Ramos Arizpe, Mexico; Ridgway, Pennsylvania; St. Marys, Pennsylvania;
Valencia, Spain; Indaiatuba, Brazil, and Warren, Michigan.
- Metaldyne’s European Forging operations, including Zell, Germany; Oslavany,
Czech Republic, and Nürnberg, Germany
- The Vibration Controls Products plants in Lyon, France, Litchfield, Michigan,
Barcelona, Spain; Halifax, UK; Suzhou, China, and a joint venture in
- The driveline machining and assembly operation in Bluffton, Indiana;
- The balance shaft module operations, located in Pyeongtaek, Korea and Fremont, Indiana.
- The tubular products operations housed in Hamburg, Michigan
- The chassis operations in Edon, Ohio; Barcelona, Spain, and Iztapalapa, Mexico
- Commercial and R&D locations in Plymouth, Michigan; Dieburg, Germany, and Tokyo, Japan
The aluminum die casting and valve body plant in Twinsburg, Ohio, is still under consideration for the sale. Subject to a purchase agreement amendment, MD Investors has an option period to make a final decision on the inclusion of this plant while various sitespecific details are addressed.
Metaldyne’s operations in New Castle, Indiana, Greensboro, N.C., Middleville, Michigan, Niles, Illinois, and Thamesville, Ontario, Canada, were not included in the sale. The Greensboro, Niles, Middleville and Thamesville plants will be closed by the end of this year, and New Castle closed on August 31.
Metaldyne and its U.S. subsidiaries filed for bankruptcy primarily as a result of excess leverage and the resulting interest expenses, plus excessive pension and lease costs, all of which resulted in strained liquidity by the unusually low production volumes in the North American automotive industry. The filing did not include the company’s nonU.S. entities or operations. To operate in Chapter 11, Metaldyne received a debtorinpossession (DIP) facility, which was funded by certain of Metaldyne's OEM customers.
Metaldyne was previously a wholly-owned subsidiary of Asahi Tec, a Shizuoka,
Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange.
Metaldyne is a leading global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. The new Metaldyne company has approximately $650 million in revenue with 26 facilities in 12 countries. For more information go to www.metaldyne.com
Forward Looking Statement
This press release contains statements that are not statements of historical fact, but instead are forwardlooking statements, as that term is defined by the federal securities laws. We caution readers not to place undue reliance on these forwardlooking statements, which reflect management’s expectations, estimates and assumptions based on information available as of the date hereof. Important factors that could cause actual results to vary materially from those expressed or implied by the forwardlooking statements are set forth in our Annual Report on the Equivalent of Form 10K for the fiscal year ended March 31, 2008 and our subsequent Quarterly Reports, and include: declining financial condition of our customers; risks associated with the condition of our suppliers and subsequent availability of product; adequacy of our liquidity to meet our obligations and grow our business; seasonal fluctuations in our business and impact on working capital; our industry’s cyclicality and dependence on general economic conditions; affordability of raw materials and components; inability to quickly replace any diminished or lost business due to the length of the sales process; risks related to termination for convenience provisions in certain of our customers’ purchase orders and unanticipated cancellation of programs by our customers; costs could potentially exceed estimates used in pricing our products; our employee benefit obligations may negatively impact future liquidity; risks related to international sales; inability to protect our intellectual property rights; environmental compliance obligations and liabilities; inability
to meet obligations for any product liability and warranty claims; unanticipated labor stoppages at our facilities or those of our customers; general economic conditions in the market sector in which we operate, including continued volume deterioration of our top three customers, changes in interest rates or foreign currency exchanges; impact of the global financial crisis on our business and liquidity; and potential consolidation, loss or insolvency of our customers. We do not intend or assume any obligation to update any of these forwardlooking statements.