DETROIT — Metals and components supplier Tower International has agreed to be acquired by private equity-owned Autokiniton Global Group in a deal valued at $900 million, the companies said Friday.
Tower International and Autokiniton announced the acquisition Friday in a news release. They expect the deal to close in September or October.
New York-based KPS Capital Partners created Autokiniton last May with former Metaldyne Performance Group CEO George Thanopoulos to build a new auto supplier. Autokiniton then acquired metal stamper L&W Inc. It was expected more acquisitions would come.
Autokiniton agreed to buy all outstanding shares of Tower for $31 per share in cash — 70 percent over Tower International’s Thursday closing stock price. The $900 million value includes Tower’s debt and pension-related liabilities, the release said.
Nearly half of Tower’s business, 47 percent, is with Ford Motor Co., according to the company’s annual 10-K report filed with U.S. regulators. Another 22 percent of its revenue comes from Fiat Chrysler Automobiles and 12 percent flows from Nissan Motor Co. It also does some business with Toyota Motor Corp., BMW Group, Volkswagen Group and Honda Motor Co.
“Tower stockholders benefit from an immediate share price premium,” Tower CEO Jim Gouin said in the release. “Tower customers will benefit from the expanded product offering and manufacturing footprint of Tower and AGG. Finally, Tower colleagues will benefit by becoming a part of a combined entity which will be a more competitive North American supplier with a complementary manufacturing footprint and lightweighting technologies that uniquely position it for continued profitable growth.”
The deal also features a 35-day period in which Tower’s board and advisers can look around for other acquisition proposals and terminate the deal if they find something better, the release said.
Tower, based near Detroit in Livonia, Mich., has around 5,700 staff and reported $1.6 billion in revenue in 2018. KPS Capital Partners managed about $5 billion in assets as of March through affiliated entities. Autokiniton is also based in suburban Detroit in New Boston, Mich.
J.P. Morgan Securities LLC is acting as financial adviser for Tower, according to the release. Houlihan Lokey Capital Inc. assisted with providing a fairness opinion. Lowenstein Sandler LLP is Tower’s legal adviser.
Goldman Sachs & Co. and Bank of America Merrill Lynch are Autokiniton’s financial advisers in the deal. The company’s legal adviser is Paul, Weiss, Rifkind, Wharton & Garrison LLP.