Metaldyne to refinance all bank debt with purchase by Asahi Tec

By Sara Rosenberg

New York, Sept. 1 - Metaldyne Corp. will refinance all of its senior bank debt in connection with its acquisition by Asahi Tec Corp., according to a company news release.

The company will also be tendering for a minimum of $225 million of its 11% senior subordinated notes due 2012 and 10% senior subordinated notes due 2014.

Under the acquisition agreement, Asahi Tec may elect not to close if Metaldyne's rating for senior term debt is lowered below certain levels and its interest cost for that debt exceeds certain levels, the release said.

Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier, is buying Metaldyne from Heartland Industrial Partners LP and CSFB Private Equity in a transaction valued at $1.2 billion, including debt.

The transaction will be effected through a cash-out merger in which Metaldyne will become a wholly owned subsidiary of Asahi Tec. Holders of 97% of Metaldyne stock will receive $2.18 for each share. The balance of the common stockholders will receive at least $2.40 for each share, and may receive a higher price if Asahi Tec's average stock price increases over a specified period prior to closing.

RHJI and co-investors, Mitsui & Co. Ltd. and Chuo Mitsui Growth Capital Investment Limited Partnership II, have agreed to invest $188 million in Asahi Tec, between $150 million and $175 million of which will be contributed to Metaldyne for debt reduction.

The transaction is targeted to be completed in the fourth quarter, subject to customary conditions, including U.S. and Japanese regulatory approvals, the closing of the private placement to Metaldyne's reinvesting stockholders and stockholder approvals at Asahi Tec and Metaldyne.

Following the transaction, Metaldyne will continue to operate independently and will keep its name.

Deutsche Bank Securities Inc., NikkoCitigroup Ltd. and Mizuho Corporate Advisory Co., Ltd. advised Asahi Tec on the transaction.

Metaldyne is a Plymouth, Mich., supplier of powertrain and chassis systems and components.

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