Wabash to sell certain non-core assets to Aurora

Wabash National Corporation and Jefferies Capital Partners, a private equity firm associated with Jefferies Group, Inc., announced today a definitive agreement for the sale of substantially all of the assets of Wabash National's trailer leasing and rental, and wholesale aftermarket parts distribution businesses to Aurora Trailer Holdings, LLC. The transaction is expected to close during the third quarter of 2003 and is subject to lender approval, buyer financing and Federal Trade Commission approval under the Hart-Scott-Rodino Act.Wabash National expects total consideration from the sale of these assets and the retained assets to be approximately $65-$70 million, of which $55 million will be paid in cash upon closing. In connection with the transaction, Wabash and Aurora have entered into long-term arrangements for the supply of parts by Aurora to Wabash's factory owned branches and the supply of new and used trailers and maintenance services by Wabash to Aurora.Commenting on the sale, Mark R. Holden, Senior Vice President and Chief Financial Officer of Wabash stated, "We are very pleased to reach this agreement with Aurora for the sale of these assets. We believe Aurora will make an outstanding business partner in these market segments. In addition, we believe this continues to allow Wabash to de-lever itself while maintaining a presence in these markets. As a result of this transaction, Wabash will record a $29 million asset impairment charge during the second quarter of 2003 to reflect the planned sale of these assets at below book value. This non-cash charge will not affect the Company's compliance under its existing bank covenants. Upon closing this transaction, all proceeds from this divestiture will go toward debt retirement which, including this amount will total approximately $90 million year-to-date." Aurora is a company formed by Jefferies Capital Partners and former and current members of the business' management teams. Mr. Derek Nagle, who most recently served as President of several Wabash businesses with revenues over $300 million, including the two businesses being acquired, will serve as President and CEO of Aurora.Mr. Nagle has extensive experience in the truck trailer industry, including the manufacturing, rental, leasing, retail and aftermarket parts segments. "The rest of the management team and I are very excited by the opportunity to build on the successes of these businesses and the opportunity to partner with Wabash," said Derek Nagle, President and CEO of Aurora. "We expect to deliver innovative and value-added solutions to the trailer leasing and rental markets, as well as the trailer parts aftermarket.""We are pleased to have the opportunity to partner with Derek and the management team in acquiring these assets," said Brian P. Freidman, President of Jefferies Capital Partners. "We believe Aurora has exceptional opportunities to develop its business and we look forward to working closely with management to achieve this potential."

TAGS: Trailers
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish