Superior Industries Closes Tender Offer To Buy Uniwheels

Superior Industries International Inc. (NYSE:SUP) announced the conclusion of tender offer to acquire Uniwheels AG’s shares. The aggregate acquisition amount is $714.7 million, financed through a combination of around $670 million of newly incurred debt and a preferred equity of $150 million.

The company noted that the subscription period for the tender offer expired on May 22. Around 11,445,080 shares had been validly tendered until that date, representing roughly 92.3% of Uniwheels shares of common stock, acquired by the Superior Industries for an average price of $714.7 million.

Both Don Stebbins, Superior Industries’ President and CEO, and Kerry Shiba, the company’s Executive Vice President and Chief Financial Officer, are set to join the Supervisory Board of Uniwheels in conjunction with this tender-closure.

Superior Industries is among the world’s largest designer and manufacturers of cast aluminum road wheels for OEMs in North America and Europe. The company said that the acquisition will benefit its stakeholders besides boosting its future growth prospects and its profitability.

During the first quarter earnings release, the company reaffirmed its full-year 2017 outlook for net sales, value-added sales and unit volume growth. It projects revenues in the range of $730-$750 million, compared to $732.7 million, reported in 2016.

The company expects 2017 value-added sales to be in the range of $400-$410 million, compared to $408.7 million, reported in 2016.

The company expects adjusted earnings before income tax depreciation and amortization (EBITDA) to increase to $97-$105 million from $88.5 million in 2016. It expects to update its full-year 2017 outlook during its second-quarter 2017 earnings call, along with the Uniwheels acquisition impact.

Superior Industries has a product portfolio designed to suit current market trends. The company has planned 10 and 11 launches in the second and third quarter of 2017, respectively.

It also undertakes different strategies to curb costs, enhance its global competitive position and improve equipment reliability through better operational and procurement practices, increased capital reinvestment and a more rigorous factory maintenance.

Price Performance

Superior Industries has underperformed the Zacks categorized Auto/Truck-Original Equipment industry in the last three months. During this period, the company’s share price dipped to 18.2%, compared to the industry’s gain of 3.2%.

Zacks Rank & Stocks Pick

Superior Industries currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the auto space include Dana Inc. (NYSE:DAN) , Allison Transmission Holdings Inc. (NYSE:ALSN) and Ferrari N.V. (NYSE:RACE) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dana has an expected long-term growth rate of 3%.

Ferrari has an expected long-term growth rate of 14.1%.

Allison Transmission has an expected long-term growth rate of 11%.

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