Ford To Sell Kwik-Fit For $500 million
DEARBORN, Mich., August 12 – Ford Motor Company [NYSE: F] announced today its intent to sign an agreement to sell Kwik-Fit, the company's European maintenance and light repair business, and that it has completed the sale of Collision Team of America (CTA), a U.S.-based chain of collision repair shops.
Upon sale of these two entities and with previously announced divestitures, the company is on track to meet its Revitalization Plan goal of $1 billion in cash realization this year from the sale of non-core operations.
CVC Capital Partners, a leading European private equity group, intends to sign an agreement to purchase Kwik-Fit for Ł330 million (about $500 million) in cash and a note that will be paid as CVC obtains outside financing.
The proposed transaction will be completed using a new company formed for the purpose, and financed by funds under the management of CVC. Ford will retain a 19 percent equity interest in the new company in order to benefit from the business's future growth. The sale is expected to be completed in the fourth quarter of 2002 and is subject to regulatory approvals. Ford will record a one-time, after-tax charge of approximately $500 million in the third quarter of 2002 related to the sale of Kwik-Fit.
Daniel Hall, a private businessman, has agreed to purchase 100 percent of the stock and assets of CTA and will operate the business along with his spouse, Rhonda Hall. The sale of CTA was completed on July 31, 2002.
"We are pleased to have found such suitable owners for both Kwik-Fit and Collision Team of America," said Martin Inglis, Ford group vice president, business strategy. "Although these are good businesses, they don't align with our back-to-basics strategy. These sales further signal the progress that Ford is making on key parts of our Revitalization Plan."
In addition, Ford has decided not to pursue the sale of Hertz Equipment Rental Corporation (HERC) at this time.
"U.S. capital spending is not recovering as quickly as anticipated, thereby delaying the recovery we expected in the equipment rental industry, " said Inglis. "As a result of these sector-specific factors, we have chosen not to pursue the sale of HERC until valuations become more favorable."
Kwik-Fit, Europe's largest maintenance and light repair operation, was purchased by Ford in 1999 and has 2,500 service centers and more than 11,000 employees. CTA operates 32 collision shops in four states (conducting business under various names) and has about 850 employees. Ford purchased a minority stake in CTA in 1998 and acquired the remaining shares in 2001. HERC is one of the world's largest rental suppliers of construction and industrial equipment including earthmoving equipment, material handling equipment, aerial and electrical equipment, air compressors, pumps, compaction equipment and construction related trucks.