Horizon Global Announces Agreement to Acquire Westfalia-Automotive and Terwa

Addition of Westfalia, Terwa and Siarr businesses represents a compelling strategic opportunity that will provide scale in Europe and enhance global footprint

Management to discuss transaction during conference call and webcast at 9:00 a.m. EDT, August 25

Dateline:

TROY, Mich.

TROY, Mich.--(BUSINESS WIRE)--Horizon Global Corporation (NYSE: HZN), one of the world’s leading manufacturers of branded towing and trailering equipment, announced today that it has entered into a definitive agreement to acquire Westfalia-Automotive and Terwa, collectively referred to as the Westfalia Group (Westfalia), a leading global towing company. As part of the transaction, Horizon Global will acquire the market-leading brands, Westfalia, Terwa and Siarr from an investor consortium led by DPE Deutsche Private Equity, which will become a shareholder of Horizon Global as part of the transaction. The combination will create a stronger company which will be well-positioned for accelerated growth in both revenue and profit, as it gains a larger pan-European presence and low-cost manufacturing in Romania.

Westfalia is the inventor of the European ball towbar and has been manufacturing and marketing high-quality branded towing products since 1932. Offering more than 1,700 different types of towbars, Westfalia is headquartered in Rheda-Wiedenbrück, Germany. Westfalia holds approximately 100 towbar patents and more than 30 transport system patents, operating facilities in 11 countries.

Acquisition Highlights

  • Acquisition will position Horizon Global as the leading manufacturer of towing and trailering equipment in Europe.
  • Combination of the companies will greatly expand the global OE footprint supporting collective global customers. Horizon Global’s aftermarket position in Europe will be greatly enhanced by the product leadership that will be brought to this channel.
  • Transaction enables Horizon Global to accelerate margin expansion, drive significant earnings and better serve existing markets and customers.
  • Horizon Global brands will benefit from the advanced technology and product innovations of Westfalia.
  • At close, Horizon Global will become an approximately $800 million global designer, manufacturer and distributor of a wide variety of high quality, custom-engineered towing, trailering, cargo management and other related accessory products.
  • Purchase price multiple of approximately 9.9x Westfalia Group’s projected 2016 adjusted EBITDA. Cost and structure synergies achieved as a result of the integration of this deal are anticipated to result in less than a 4.0x adjusted EBITDA purchase price multiple in three years.
  • Acquisition will be accretive in 2017 and will provide significant earnings per share accretion in future years.
  • The parties expect to complete the transaction during the fourth quarter of 2016, subject to the satisfaction of customary closing conditions.

“Our company is extremely pleased to add the iconic brands, design innovation, and manufacturing expertise of Westfalia to our proven global platform,” said A. Mark Zeffiro, President and Chief Executive Officer of Horizon Global. “The addition of Westfalia is very complementary to our business, adding to our regional profile with new customer channels and broadened product offering. As part of this transaction, we are also pleased to welcome DPE Deutsche Private Equity as a shareholder. We are creating a powerful combination of companies that are established, global market leaders and innovators when it comes to designing and manufacturing towing systems for automotive equipment manufacturers, retailers and aftermarket customers.”

Volker Hichert, founding partner at DPE Deutsche Private Equity, commented, “We are excited about the prospect of building a relationship with Horizon Global as it moves into the next phase of growth with the acquisition of Westfalia. DPE has been highly active in the sector, and Horizon Global stands for the type of company in which we seek to invest – a strong management team, leading industry brands and global scale with this new combination of companies representing an inflection point to drive significant global growth and shareholder value.”

Concluded Zeffiro, “This significant acquisition will be a very positive statement regarding the strength of our company and our confidence in our ability to grow both existing and newly acquired brands around the world. We are pleased to welcome the entire Westfalia team to the Horizon Global family. This transaction promises to deliver significant opportunities for future growth and meaningful earnings accretion that will generate an attractive return for all Horizon Global shareholders.”

Horizon Global intends to fund the acquisition, comprised of approximately €89 million cash and assumed net debt of €42 million, which will be refinanced, through an expansion of its existing term loan. In addition, €36 million in Horizon Global common stock will be issued to the sellers.

Wells Fargo Securities is serving as financial advisor to Horizon Global in the transaction, with Ernst & Young LLP providing due diligence services. Eversheds LLP and Jones Day are acting as the Company’s legal advisors. JPMorgan is lead arranger of the expansion of the existing term loan.

Conference Call and Webcast Information

Horizon Global will host a conference call on Thursday, August 25, 2016, at 9:00 a.m. Eastern Time. Participants on the call are asked to register five to 10 minutes prior to the scheduled start time by dialing (844) 711-8052 and from outside the U.S. at (832) 900-4641. Please use the conference identification number 70199564. The conference call will be webcast simultaneously, and in its entirety, through the Horizon Global website. Shareholders, media representatives and others may participate in the webcast by registering through the Investor Relations section on the Company’s website. The presentation will also be available on the Company’s website at www.horizonglobal.com .

A replay of the call will be available on Horizon Global’s website or by phone by dialing (800) 585-8367 and from outside the U.S. at (404) 537-3406. Please use the conference identification number 70199564. The telephone replay will be available approximately two hours after the end of the call and continue through September 1, 2016.

About Horizon Global

Headquartered in Troy, Michigan, Horizon Global Corporation (NYSE: HZN) is a leading designer, manufacturer and distributor of high-quality, custom-engineered towing, trailering, cargo management and related accessory products for original equipment, aftermarket and retail channel customers on a global basis. Our mission is to utilize forward-thinking technology to develop and deliver best-in-class products for our customers, engage with our employees and realize value creation for our shareholders. For more information, please visit www.horizonglobal.com .

About Westfalia-Automotive

Headquartered in Rheda-Wiedenbrück, Germany, Westfalia-Automotive is one of the worldwide leading manufacturers of towbars, wiring kits and carrier systems for cars and light utility vehicles with an international presence. In total, more than 1,700 different towbar types for almost all vehicle brands are developed and produced. The company has approximately 900 employees.

About DPE Deutsche Private Equity

DPE Deutsche Private Equity GmbH (DPE) is an independent German private equity investment company investing in small and medium-sized enterprises (SMEs) in Germany, Austria and Switzerland. Since its foundation in 2007, DPE successfully launched two funds with total assets of over €600 million and invested in 18 companies. For more information, please visit http://www.dpe.de.

SAFE HARBOR STATEMENT

This presentation may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained herein speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as "may," "could," "should," "estimate," "project," "forecast," "intend," "expect," "anticipate," "believe," "target," "plan" or other comparable words, or by discussions of strategy that may involve risks and uncertainties. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the Company's leverage; liabilities imposed by the Company's debt instruments; market demand; competitive factors; supply constraints; material and energy costs; technology factors; litigation; government and regulatory actions; the Company's accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company's business and industry; our ability to successfully complete the acquisition of Westfalia, including the possibility that the closing conditions to the contemplated transaction may not be satisfied or waived; delay in closing the proposed transaction; risks inherent in the achievement of cost synergies and the timing thereof, including whether the proposed acquisition will be accretive and within the expected timeframe; risks related to the disruption of the transaction to Westfalia and its management; the effect of announcement of the transaction on Westfalia’s ability to retain and hire key personnel and maintain relationships with customers, suppliers and other third parties; our ability to promptly and effectively integrate the acquisition of Westfalia; the performance and costs of integration of Westfalia; and other risks that are discussed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. The risks described herein are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows. We caution readers not to place undue reliance on such statements, which speak only as of the date hereof. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:

Horizon Global Corporation
Maria C. Duey
Vice President, Corporate Development & Investor Relations
(248) 593-8810
mduey@horizonglobal.com