VAN BUREN TOWNSHIP, Mich.,
June 9, 2015
- Transaction valued at approximately
$3.6 billion USD
- Company expects to return $2.5
billion-$2.75 billion of cash to shareholders over the next
12 months via series of actions, including buybacks and
special distributions
- $500 million accelerated
share repurchase program expected to begin during second
quarter
- Visteon now positioned as pure-play vehicle cockpit
electronics/connected car company, well-capitalized and poised for
growth
/PRNewswire/ -- Visteon Corporation (NYSE: VC) has completed the
sale of its approximately 70 percent ownership interest in Halla
Visteon Climate Control Corp. (HVCC) to an affiliate of Hahn &
Company, and Hankook Tire Co. Ltd., for approximately $3.6 billion or 52,000
KRW/share. Visteon also announced it will commence a
shareholder capital return program in the second quarter of this
year.
Announced in December 2014, the
sale of Visteon's ownership stake in HVCC, a global supplier of
automotive thermal management products, represents an enterprise
value for HVCC of approximately 10.1 times EBITDA for the 12 months
ended Sept. 30, 2014. As a result of
this sale, Visteon is now a technology-focused, pure-play supplier
of automotive cockpit electronics and connected car solutions – one
of the world's leading providers of vehicle information and
controls, audio and infotainment, and domain controllers.
"With our strong cockpit electronics portfolio, diverse customer
base and unrivaled global footprint, we are focused and
well-positioned to support our customers in the new era of the
connected vehicle," said Francis
Scricco, Visteon Chairman of the Board. "We are also pleased
to deliver meaningful returns to our shareholders as a result of
the sale of HVCC – a solid business that we wish well under new
ownership."
As previously announced, Visteon expects to return $2.5 billion-$2.75 billion of cash to
shareholders over the next 12 months via a series of actions
including buybacks and special distributions. The first action is
expected to involve a $500 million
buyback in the form of an accelerated share repurchase program to
be executed as soon as practicable and completed no later than
Dec. 31, 2015. Due to complex U.S.
tax rules relating to changes in ownership, there can be
significant restrictions placed on the future utilization of
existing tax attributes (e.g. net operating losses) if a change in
control were deemed to occur. Due to the detrimental impact a share
repurchase program has on the change in control calculation, and
considering Visteon's tax attributes exceed $1 billion, Visteon is limiting its share
repurchase program to $500 million in
2015. The company will continue to review changes in its
shareholder base and their implications for its capital return
strategy.
The remainder of the capital return program is expected to
include an action or series of actions including a special
distribution in 2016. The special distribution is expected to be
structured in a manner that treats the distribution primarily as a
return of capital for U.S. income tax purposes. Currently,
Visteon's management, after review with the company's outside tax
advisors, expects the vast majority of the special distribution to
be a return of capital to the extent of each shareholder's basis.
Management currently expects less than $250
million of the distribution will be treated as a qualified
dividend. However, the company's study is ongoing and will be
affected by future variables and is thus subject to change.
After completing the capital return program, Visteon expects to
be well-capitalized and well-positioned for both organic growth and
value-accretive acquisitions.
Advising Visteon on the transaction were Rothschild; UBS
Investment Bank; and Skadden, Arps, Slate, Meagher & Flom
LLP.
About Visteon
Visteon is a global technology company that designs, engineers
and manufactures innovative cockpit electronics products and
connected car solutions for most of the world's major vehicle
manufacturers. Visteon is a leading provider of driver information
and controls, audio and infotainment, and domain controllers; its
brands include LightScape®, OpenAir® and SmartCore™. With corporate
offices in Van Buren Township,
Michigan, (U.S.); Shanghai,
China; and Chelmsford, UK;
Visteon has more than 12,000 employees at 50 facilities in 21
countries. Visteon had sales of $7.51
billion in 2014. Learn more at www.visteon.com.
Forward-looking Information
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not guarantees of future results and
conditions but rather are subject to various factors, risks and
uncertainties that could cause our actual results to differ
materially from those expressed in these forward-looking
statements, including, but not limited to: (1) conditions within
the automotive industry, including (i) the automotive vehicle
production volumes and schedules of our customers, (ii) the
financial condition of our customers and the effects of any
restructuring or reorganization plans that may be undertaken by our
customers or suppliers, including work stoppages, and (iii)
possible disruptions in the supply of commodities to us or our
customers due to financial distress, work stoppages, natural
disasters or civil unrest; (2) our ability to satisfy future
capital and liquidity requirements; including our ability to access
the credit and capital markets at the times and in the amounts
needed and on terms acceptable to us; our ability to comply with
financial and other covenants in our credit agreements; and the
continuation of acceptable supplier payment terms; (3) our ability
to satisfy pension and other post-employment benefit obligations;
(4) our ability to access funds generated by foreign subsidiaries
and joint ventures on a timely and cost-effective basis; (5) our
ability to execute on our transformational plans and cost-reduction
initiatives in the amounts and on the timing contemplated; (6)
general economic conditions, including changes in interest rates,
currency exchange rates and fuel prices; (7) the timing and
expenses related to internal restructurings, employee reductions,
acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations; (8) increases in raw material
and energy costs and our ability to offset or recover these costs,
increases in our warranty, product liability and recall costs or
the outcome of legal or regulatory proceedings to which we are or
may become a party; and (9) those factors identified in our filings
with the SEC (including our Annual Report on Form 10-K for the
fiscal year ended Dec. 31,
2014).
Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our view only as of the
date of this release, and which we assume no obligation to
update.
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SOURCE Visteon Corporation