Following the signing of a strategic agreement, shares of Horizon Global Corporation (NYSE: HZN) soared 339.81% to $1.71 in the first premarket session of the year.
Which contract has HZN signed?
Today, Horizon Global (HZN) said that it has signed a binding merger agreement with First Brands Group, LLC (“First Brands”), a major producer of automobile components for the global aftermarket. In accordance with the contract, First Brands will purchase Horizon Global (the “Transaction”). The parameters of the transaction include an all-cash tender offer, under which each shareholder of HZN common stock will be eligible to earn $1.75 in cash upon successful closure.
Highlights of the Transaction include the creation of a grouping of market-leading brands in the automobile sector that will serve both OEM and aftermarket channels. With best-in-class technology, engineering, manufacturing, and customer service, First Brand’s well-known portfolio of braking solutions, filters, wiper blades, gas springs, spark plugs, and fuel and water pumps is complemented by HZN’s portfolio of innovative towing and trailering brands and products.
In order to maintain the expansion and product development that have been long-term strategic priorities for HZN, the merged firm will have better access to financing. This will allow the combined group to continue servicing its sizable customer base uninterrupted. Despite the challenging market environment, the Transaction offers a 237% premium over the 30-day volume-weighted trading price in HZN common shares and a 31% premium over the price per share prior to the tactical alternative disclosure in August 2022.
The bid of shares representing at least a majority of the total number of HZN’s outstanding shares of common stock, the tender of Series B preferred stock for cash equal to the applicable redemption price, as well as other customary conditions, are among the terms that must be met before the transaction can close. No further statutory submissions or clearances are expected in the context of the transaction outside those with the SEC. The Transaction is anticipated to close in the first quarter of 2023, according to Horizon Global.
How advantageous does HZN see the transaction?
The Transaction is the result of a careful examination of the strategic alternatives mentioned in August, and Horizon Global (HZN) considers it to be the best result for its clients, partners, shareholders, and staff. Following the sale, First Brands will expand on the well-established goods, clients, and brands of HZN.