Tower International to sell European unit in $291 million deal
DETROIT -- Longtime metal components supplier Tower International said it agreed to sell off its European division to a privately owned French automotive supplier in a deal valued at about $291 million.
The company, based near Detroit in Livonia, Mich., said in a Friday statement that the stock transaction is contingent on regulatory approval, but its expected to close during the first quarter of 2019.
The company did not immediately respond to a request for comment from Crains Detroit Business, an affiliate of Automotive News, but in a statement CEO Jim Gouin said the company is poised for growth.
"Since 2014, Towers North American business has grown by more than 40 percent in a relatively flat production environment as we have benefited from the industrys shift from passenger cars to trucks and SUVs as well as OEM outsourcing," Gouin said.
In Europe, which represents a third of the suppliers revenue, Gouin said in July on a conference call for second-quarter earnings, sales dropped 0.2 percent for the third-quarter compared to last year. Total revenue grew 14 percent to $525 million for the quarter.
Tower International lists most of the worlds largest automakers and brands as customers. It was formed in 1993, but traces its roots back more than century to the A.O. Smith Automotive Products Co. A.O. Smith invented the steel frame first used on the 1903 Cadillac.
Tower struggled over the years with the inherent swings in steel prices and in 2005 filed for Chapter 11 bankruptcy, emerging from court protection in 2007 under the control of private equity giant Cerberus Capital Management. Cerberus took Tower public in 2010 on the New York Stock Exchange.
Tower ranks No. 86 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $2 billion during the 2017 fiscal year.