Apollo Funds, managed by Apollo Global Management Inc. is acquiring a majority stake in ABC Technologies Holdings Inc. from Cerebrus Capital Management LP.
Apollo will purchase 51 percent of outstanding common shares of the company for C$10 (US$7.97) per common share, an April 13 news release said.
ABC set those prices for a planned IPO in February after lowering it from C$12 (US$9.40) to C$15 (US$10.94) per share.
Toronto-based ABC has extensive auto part production. It is No. 9 in Plastics News' ranking of North American injection molders with an estimated $625 million worth of sales in the region, and is No. 15 among blow molders with $425 million in sales.
"ABC's strong operational and financial performance, combined with its near-term opportunities as a platform for industry consolidation in the automotive technical plastics space, led to an unsolicited offer from the Apollo Funds to acquire a majority stake in the company and join in the journey outlined during ABC's recent IPO process," Todd Sheppelman, ABC Technologies president and CEO, said in the release.
"Upon closing … the parties will enter into an amended and restated investor rights agreement, which will provide Apollo with, among other things, certain director nomination rights, registration rights, preemptive rights and information rights," the release said.
At closing, Apollo will also be able to nominate five of the nine members of ABC's board and ABC will retain its ability to nominate three members of the board.
Apollo and ABC expect to announce the future composition of the board closer to the closing date, it said.
According to the terms of the agreement, the acquisition price may increase to C$10.64 (US$8.48) per common share "upon consummation of one or more acquisitions" by ABC, "meeting certain agreed-upon thresholds, if entered into prior to or within 12 months following closing."
"We are excited to gain access to Apollo's expertise and resources and look forward to a highly collaborative relationship as we continue to grow our business and better serve global automotive customers with industry-leading products," Sheppelman added.
"We are excited by the [company's] ability to act as a consolidator of the fragmented plastics supplier space, a market with strong momentum driven by vehicle lightweighting and a sustained increase in automotive plastics contents," Apollo partner Michael Reiss said. "We believe Todd and the management team are the right leaders to help ABC Technologies become a global force in the Tier 1 automotive supplier space and Apollo looks forward to supporting the company on this path."