BOSAL sells ACPS-division to TowerBrook Capital Partners
BOSAL Group, a leading global manufacturer of exhaust systems, catalytic converters and tow bar systems for the automotive industry, today announces the divestment of its Automotive Carrier and Protection Systems (ACPS)-division and After Market tow bars-business to TowerBrook Capital Partners, a transatlantic investment management firm, pending regulatory approval and works council’s advice. This is the most important milestone in BOSAL’s comprehensive ‘Grow-Fix-Divest’ turnaround effort initiated less than a year ago. Following the divestment, BOSAL can boast a sound financial position. The company will use the proceeds, which remain undisclosed, to clear all third party senior debt, establishing a healthy financial leverage situation. BOSAL’s shareholder remains committed to the company with a loan facility and strategic support. Proceeds will also be used to invest in the remaining core ECS (exhaust systems)-division.
Bosal ACPS is the leading manufacturer of tow bars for original equipment manufacturers and suppliers (OEM/OES) and for the aftermarket in Europe. BOSAL ACPS has manufacturing facilities in Germany (where it is headquartered), Hungary, Mexico, France and Russia. The company introduced the retractable tow bar in the early 2000s and the first fully electric retractable tow bar in 2010.
Ramez Sousou, co-CEO and co-founder of TowerBrook said about the acquisition: “BOSAL ACPS enjoys a leading market position underpinned by its footprint, product quality and innovation. The business has a number of potential opportunities to drive growth and operational improvements. TowerBrook’s expertise, together with its transatlantic networks and longstanding relationships in the automotive industry, complement and support management’s ambitious plans.”
TowerBrook has engaged Gerhard Boehm, the Vice Chairman of Reydel Automotive, to serve on the Board as Chairman and as CEO. Mr Boehm has extensive experience of the industry through his former roles of head of FM Powertrain, CEO of Peguform and head of Continental Engine Systems. TowerBrook and the management of Bosal ACPS see significant potential for international growth, as well as opportunities for operational improvement. They also have ambitious plans to accelerate technological innovation, partnerships and acquisitions.
Deleveraging and improved performance
BOSAL's announcement today follows a series of earlier communications during 2017 regarding a number of strategic measures, implemented by management, including the sales of its Cabins and US Aftermarkets divisions, restructuring measures on operational levels, investments in new production capacity and a complete refinancing of the company. The divestment of the ACPS-division represents the most important milestone in this transformation as it allows the company to deleverage and to fully focus on growing its ECS business. The company had already succeeded in improving its performance during 2017, with growing sales in both the ECS and ACPS-divisions and a better operational performance.
Ton Vernaus, CEO of BOSAL Group, comments: “We are delivering on the plans we have announced less than a year ago, which provides confidence in BOSAL’s ability to perform going forward. Following completion of the ACPS-deal we are out of the woods from a financial point of view, after what has been a challenging period since 2016. We are grateful to our financial partners for sitting out the ride with us. We leave ACPS, including our people, with much confidence in the capable hands of TowerBrook and are convinced it will see a bright future. Our focus will be to further build BOSAL, centred around our ECS-systems. Looking at global market research, we see good potential for the next two decades, even in an age of electrification of the automotive sector. We have prepared ourselves for this moment by making important changes to the organization and operations of ECS, as well as investing in more capacity. We also have won important new contracts during 2017. Things look good”.
Following the completion of the ACPS-sale, which is expected to take place at the end of Q1 of 2018, BOSAL will continue to operate as a globally leading specialist in exhaust systems, having refocused on ECS as its core business and its ECS-After Market activities. The first transformational activities that have been initiated in 2017 are bearing fruit, with growth in revenues and a positive EBITDA result projected for 2018. The company will operate with two main production hubs (in Mexico and Czech Republic) and a R&D and support facility in Belgium, having its headquarters located in The Netherlands. BOSAL will generate sales of 250-300 million euro, with around 2,500 employees. “Our ECS-clients and the market will see a fully focused exhaust systems specialist emerging, with the technical, operational and financial means to innovate and create new applications in a rapidly changing market. We are ready to move forward”, said Vernaus.
The sales of ACPS and the After Market tow bar-divisions is subject to normal regulatory approval processes as well as advice from the works council. Following the carve out of ACPS, the company will restructure its headquarters functions and will continue to right-size its remaining activities.