Lear to transfer interior business to joint venture
08/12/2006
One of the world's largest suppliers of automotive interior systems and components Lear Corporation has reached a definitive agreement with WL Ross & Co and Franklin Mutual Advisers to transfer the assets of its North American Interior business and $25 million of cash to a newly-formed joint venture, International Automotive Components Group North America, LLC (IAC North America).
Lear will hold a 25% equity interest and warrants for an additional 7% equity interest in the new venture company. Under the terms of the agreement, WL Ross and Franklin will make aggregate cash contributions of $75 million to IAC North America, in exchange for the remaining equity, and extend a $50 million loan.
According to Lear, the transaction completes a series of strategic initiatives intended to improve the company's ongoing operating results, strengthen its balance sheet and increase operating flexibility
Lear's North American Interior business has annual sales of approximately $2.5 billion.
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