Martinrea International Inc.

Martinrea International Inc.

August 07, 2014 08:00 ET

Martinrea International Inc. Purchases Minority Interest of Martinrea Honsel

TORONTO, ONTARIO--(Marketwired - Aug. 7, 2014) - Martinrea International Inc. (TSX:MRE) ("Martinrea" or the "Company") announced that it has acquired from Anchorage Capital Group, L.L.C. ("Anchorage") the remaining 45% equity interest in Martinrea Honsel Holdings B.V. ("Martinrea Honsel") for a purchase price of EUR160 million (approximately $233 million Canadian). Martinrea Honsel, a leading supplier of aluminum components to the automotive industry, specializing in structural parts, engine blocks and other selected aluminum automotive parts, is now a wholly owned subsidiary of Martinrea. Payment of the purchase price was financed through loans arranged with the Company's banking syndicate.

Rob Wildeboer, Martinrea's Executive Chairman, stated: "We are very pleased with the completion of this transaction, which allows us to capitalize further on the trend to lighter weight aluminum-based solutions and pursue growth opportunities in this area. It will also enable us to allocate our capital more efficiently amongst our businesses, focusing on key growth areas. The acquisition of the minority interest of Martinrea Honsel will be accretive on an EBITDA and net income basis, although given the timing of the transaction there will be minimal impact in the third quarter of 2014, as August is typically a slow month in Europe because of customer summer shutdowns. We will see accretion in our fourth quarter and in future years."

Wildeboer continued: "We negotiated and paid what we believe is a very fair price for both parties. Anchorage has been a wonderful and supportive partner over the past three years, helping us build the value of this business substantially. From the outset both firms intended to ultimately transfer Honsel to being a fully-owned member of the Martinrea family, and are pleased that objective has been accomplished. We thank Anchorage for their support and would look forward to partnering with them again in the future. I also want to thank our banking syndicate for its typically strong support for our team. Our lenders know the strength of this Company and our commitment to prudent, profitable growth over time."

Nick Orlando, Martinrea's President and Chief Executive Officer, stated: "This transaction reflects the great work of our Martinrea and Honsel teams over the past three years. Our Martinrea team went to Honsel in 2011, and, working with our people in Germany, Spain, Mexico and Brazil, took a bankrupt asset and rebuilt it. Our people instilled operational discipline and systems throughout the organization, made many tough restructuring decisions to make us competitive, rationalized our product offerings, and made us profitable with great growth prospects. Our people are motivated and passionate about our company. The increased value of Martinrea Honsel is a testament to doing many positive things. We congratulate Juan Nardiz, the President of Martinrea Honsel, and his team for their efforts, and we are very appreciative of the efforts of the very many Martinrea people who made this happen."

Kevin Ulrich, CEO at Anchorage, stated: "We are pleased to have partnered with Martinrea on the rescue and successful turnaround of Honsel. Our firms shared a vision of saving this formerly over-leveraged company by eliminating virtually all of its debt and investing substantially in growth and technology. Today, Martinrea Honsel is a financially strong, global company with a blue chip customer base, and is well positioned to grow under the continued stewardship of Martinrea."

The Company financed the purchase through the use of an expanded banking facility, with current and new lenders making new commitments. Today the banking facility is composed of nine institutions, including leading Canadian and international banks-The Toronto-Dominion Bank, which arranged the syndicate, Export Development Canada, Bank of America Merrill Lynch, JP Morgan Chase Bank, N.A., The Bank of Nova Scotia, BMO Financial Group, HSBC Bank Canada, Canadian Imperial Bank of Commerce and Caisse centrale Desjardins. In order to fund the purchase, the credit facility was expanded appropriately, the term was extended to mid-2018, and security was given on Martinrea Honsel assets. The current variable interest rate for the loans is very competitively priced at approximately 3%, and will vary over time as interest rates overall and Company leverage change.

Fred Di Tosto, Martinrea's Chief Financial Officer, stated: "The Company's financial position is and remains strong. The strength of our operations, management, cash flow and balance sheet are reflected in the commitments made by our lenders. Even though we have increased our bank debt, our leverage ratios including debt/EBITDA, which is the usual key financial ratio with lenders for a company like ours, remain at acceptable levels. We have negotiated more favourable covenants and have increased flexibility on our borrowings. The low interest rate on the debt is also a reflection of our financial strength."

About Martinrea International Inc.

Martinrea International Inc. (TSX:MRE) is a leader in the production of quality steel and aluminum metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector. Operating 38 plants in North America, South America, Europe and Asia, the Company is a Tier One supplier, serving vehicle manufacturers, automotive suppliers and other industrial sectors worldwide. For more information visit our website at

Special Note Regarding Forward-Looking Statements:

This Press Release contains forward-looking statements within the meaning of applicable Canadian securities laws, including statements as to: the impact of the acquisition of the minority interest from Anchorage, including the accretive nature of the transaction; as well as other forward looking statements. The words "continue", "expect", "anticipate", "estimate", "may", "will", "should", "views", "intend", "believe", "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Many factors could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors discussed in detail in the Company's Annual Information Form dated March 30, 2014 and other public filings which can be found at These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking statements. The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol "MRE".

Contact Information

  • Martinrea International Inc.
    Fred Di Tosto
    Chief Financial Officer
    (416) 749-0314
    (289) 982-3001 (FAX)

    Martinrea International Inc.
    3210 Langstaff Road
    Vaughan, Ontario L4K 5B2