Proceeds to Further Strengthen Balance Sheet and Support Growth in Vehicle Systems and Controls, Asian Markets and Aftermarket Products and ServicesTROY, Mich., Feb 02, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- ArvinMeritor, Inc.,
(NYSE: ARM) announced today that it has signed a definitive agreement to sell
its Emissions Technologies business group to One Equity Partners (OEP), an
equity investment firm based in New York. Cash and other consideration total
approximately $310 million. The transaction is expected to be completed in the
third quarter of fiscal year 2007.
"The decision to sell our Emissions Technologies business is part of our
long-term strategy to refocus our company and concentrate on the strengths and
core competencies that will generate future earnings growth for ArvinMeritor,"
said Chairman, CEO and President Charles G. "Chip" McClure. "The proceeds from
this sale will support our continued efforts to strengthen our balance sheet,
and increase our ability to invest in technology, research and development
that more closely aligns with our strategic focus on selected vehicle
"By focusing on and investing in our light and commercial vehicle
businesses where we have superior products, strong market positions and higher
margins, we see greater potential for sustained profitable growth in our core
capabilities," McClure said. These include:
- Chassis -- vehicle stability (ride and handling -- braking and
suspension systems and wheels)
- Drivetrain -- vehicle propulsion (steer axles, drivelines, suspensions,
trailer axles and all-wheel drive systems and hybrids)
- Apertures -- vehicle safety and security (body and control systems, such
as doors and roofs).
"We continue to be committed to diversifying our customer base, expanding
our global presence and strengthening our product portfolio in areas that
provide the highest value to our customers and return the greatest value to
our shareowners," McClure continued.
"In addition, we are implementing an aggressive strategy in Asia, and
committing resources to sustainable and profitable growth in this region,"
said McClure. "We also are planning to increase our global aftermarket and
specialty businesses, and we are funding advanced engineering, research and
development initiatives that will better position us for the challenges
ArvinMeritor's overarching strategy is to become a global systems leader
in its target markets, to build product technology and develop capabilities
that are scalable across markets and platforms, and to profitably
commercialize solutions that meet customers' growing needs.
"ArvinMeritor's new Performance Plus program also is helping to transform
the company by identifying revenue growth and cost savings opportunities that
will position us for future global expansion and success. Together with the
transaction we are announcing today, Performance Plus will help us build a
more focused, sustainable and profitable business model for ArvinMeritor,"
"While we are confident in the growth potential of the emissions
technologies portfolio, we believe that this business will be better served by
an organization that is specifically positioned to invest capital and
management resources in its development and growth," McClure added.
"OEP is looking forward to working with the Emissions Technologies
management team to execute a focused and aggressive growth plan," said OEP
Senior Partner, Lee Gardner. "We believe that the worldwide push to reduce
pollutants and greenhouse gas emissions will create long-term opportunities
for companies focused on advanced exhaust and emissions technology, and we are
very pleased to be acquiring a leading company in this industry. We will seek
to build on the competitive strengths of the business and position it for
The Emissions Technologies business is a leader in the global emission
technology industry, serving worldwide light and commercial vehicle
manufacturers. The business has operations in 19 countries, 7,500 employees
and several long-term joint venture relationships. H. H. "Buddy" Wacaser,
President of Emissions Technologies, and his management team will continue to
lead it following the close of the transaction.
Once the transaction closes, the new Emissions Technologies company will
have dual headquarters in Columbus, Indiana, as well as in the metro Detroit
JPMorgan Securities is providing the debt financing in connection with
The transaction is subject to standard regulatory approvals, including
review under the Hart-Scott-Rodino Antitrust Improvements Act. Consultation
with employee representatives will also take place.
After the sale of its Emissions Technologies business, ArvinMeritor will
have about 20,000 employees, with 75 facilities in 22 countries. The company
will maintain its diversified customer mix and a strong global presence.
The company anticipates sales from continuing operations in fiscal year
2007 in the range of $5.9 billion to $6.1 billion, and the outlook for full-
year diluted earnings per share from continuing operations to be in the range
of $1.00 to $1.10. Cash flow guidance for fiscal year 2007 is $50 million to
$100 million. This guidance assumes that the Emissions Technologies
transaction closes during the third quarter of fiscal 2007, and excludes gains
or losses on divestitures, restructuring costs, and other special items,
including potential extended customer shutdowns or production interruptions.
The company reduced its fiscal year 2007 forecast for light vehicle
production to 15.3 million vehicles in North America, down from 15.8 million
forecast last quarter. The company's forecast for Western Europe is unchanged
at 16.1 million vehicles.
ArvinMeritor's forecast for North American Class 8 truck production is
235,000 units in fiscal year 2007 (200,000 for the 2007 calendar year),
unchanged from our previous forecast. The company's fiscal year 2007 forecast
for heavy and medium truck volumes in Western Europe is 475,000 units, up from
the previous forecast of 419,000.
About One Equity Partners
One Equity Partners (OEP) manages $5 billion of investments and
commitments for JPMorgan Chase & Co. in direct private equity transactions.
Partnering with management, OEP invests in transactions that initiate
strategic and operational changes in businesses to create long-term value.
OEP's investment professionals are located across North America and Europe,
with offices in New York, Chicago and Frankfurt.
ArvinMeritor, Inc. is a premier global supplier of a broad range of
integrated systems, modules and components to the motor vehicle industry. The
company serves light vehicle, commercial truck, trailer and specialty original
equipment manufacturers and certain aftermarkets from more than 110
manufacturing facilities globally. Headquartered in Troy, Mich., ArvinMeritor
has employed approximately 27,500 people in 26 countries. ArvinMeritor common
stock is traded on the New York Stock Exchange under the ticker symbol ARM.
For more information, visit the company's Web site at:
The company's boilerplate will be revised following the close of the
Emissions Technologies transaction.
All earnings per share amounts are on a diluted basis. The company's
fiscal year ends on the Sunday nearest Sept. 30, and its fiscal quarters end
on the Sundays nearest Dec. 31, March 31 and June 30. All year and quarter
references relate to the company's fiscal year and fiscal quarters, unless
This press release contains statements relating to future results of the
company (including certain projections and business trends) that are "forward-
looking statements" as defined in the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are typically identified by words or
phrases such as "believe," "expect," "anticipate," "estimate," "should," "are
likely to be," "will" and similar expressions. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including but not limited to global economic and market cycles
and conditions; the demand for commercial, specialty and light vehicles for
which the company supplies products; risks inherent in operating abroad
(including foreign currency exchange rates and potential disruption of
production and supply due to terrorist attacks or acts of aggression);
availability and cost of raw materials, including steel; OEM program delays;
demand for and market acceptance of new and existing products; successful
development of new products; reliance on major OEM customers; labor relations
of the company, its suppliers and customers, including potential disruptions
in supply of parts to our facilities or demand for our products due to work
stoppages; the financial condition of the company's suppliers and customers,
including potential bankruptcies; possible adverse effects of any future
suspension of normal trade credit terms by our suppliers; potential
difficulties competing with companies that have avoided their existing
contracts in bankruptcy and reorganization proceedings; successful integration
of acquired or merged businesses; the ability to achieve the expected annual
savings and synergies from past and future business combinations and the
ability to achieve the expected benefits of restructuring actions; success and
timing of potential divestitures; potential impairment of long-lived assets,
including goodwill; competitive product and pricing pressures; the amount of
the company's debt; the ability of the company to continue to comply with
covenants in its financing agreements; the ability of the company to access
capital markets; credit ratings of the company's debt; the outcome of existing
and any future legal proceedings, including any litigation with respect to
environmental or asbestos-related matters; rising costs of pension and other
post-retirement benefits and possible changes in pension and other accounting
rules; as well as other risks and uncertainties, including but not limited to
those detailed herein and from time to time in other filings of the company
with the SEC. These forward-looking statements are made only as of the date
hereof, and the company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as otherwise required by law.
Web Cast and Conference Call
The company will host a web cast and telephone conference call to discuss
the sale of its Emissions Technologies business on Friday, Feb. 2, 2007, at 10
a.m. (EST). To participate, call (617) 213-8900 ten minutes prior to the
start of the call. Please reference participant passcode 93171456 when
dialing in. Investors can also listen to the conference call in real time --
or for 90 days by recording -- by visiting www.arvinmeritor.com.
A replay of the call will be available from noon (EST) on Feb. 2, 2007,
until 11:59 p.m. on Feb. 7, 2007, by calling (888) 286-8010 (within the United
States and Canada) or (617) 801-6888 for international calls. Please refer to
The presentation will be available on the ArvinMeritor Web site at
www.arvinmeritor.com beginning at 9 a.m. (EST) on Feb. 2, 2007.
To access the Web cast, visit the ArvinMeritor Web site at
www.arvinmeritor.com and click on the Web cast link on either the investor
page or the home page.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO )
SOURCE ArvinMeritor, Inc.
Media, Lin Cummins