TORONTO--(BUSINESS WIRE)--ABC Technologies Holdings Inc. (TSX: ABCT) (“ABC Technologies”, “ABC” or the “Company”), a leading manufacturer and supplier of custom, highly engineered technical plastics and lightweighting innovations to the global automotive industry, today announced that it has entered into a definitive agreement to acquire Karl Etzel GmbH (“Etzel”) from the Schrrle family for approximately US$95 million (the “Etzel Acquisition”).
Based in Muhlacker, Germany, Etzel was founded in 1976 and is a leading tier-1 and tier-2 supplier to the German luxury OEM market. Etzel’s expertise in injection molding plastics for OEM interiors and exteriors will grow ABC’s product suite in the European market as well as provide greater diversification to German-based global OEMs. For the LTM period ended November 2021, Etzel generated approximately US$100 million in revenue.
“The acquisition of Etzel will provide ABC the opportunity to meaningfully expand our scale in Europe while entering the interior products space on the continent with a strong customer base of luxury OEMs. These OEMs have looked to Etzel to provide global solutions, which will be enabled with ABCs existing footprint,” said Todd Sheppelman, President and CEO of ABC Technologies. “Etzel’s management team has built a solid European foundation from which to grow with its existing customers, especially in North America, as well as giving ABC a base upon which to cross-sell its existing product suite.”
“Etzel and its employees are excited to join ABC Technologies, which will allow us to reach a new level of growth through a more global organization,” said Etzel’s President and CEO, Andreas Schrrle. “ABC’s leadership position in the injection molding and lightweighting market will enable Etzel to expand in North America, where our German OEM customers have significant manufacturing presence, but where we have thus far not been able to serve them. We see this as a great match for Etzel, ABC and our customers.”
The Etzel Acquisition is subject to approval by the German Federal Antitrust Office and the Austrian Federal Competition Authority. The Etzel Acquisition is expected to close in ABC Technologies’ Fiscal Third Quarter 2022 (1st Quarter CY 2022).
Etzel Acquisition Financing Commitment
To finance the Etzel Acquisition, the Company today announced a debt commitment letter (the “Etzel Acquisition Financing Commitment”) from each of AP IX Alpha Holdings (Lux) S..r.l, the Company’s controlling shareholder (“AP IX Alpha”) and a fund managed by affiliates of Apollo Global Management, Inc. (together with AP IX Alpha, the “Apollo Funds” or “Apollo”), and OCM Luxembourg OPPS XI S..r.l. (“OPPS XI”) and OCM Luxembourg OPPS XB S..r.l. (“OPPS XB”, and together with OPPS XI, the “Oaktree Funds”), funds managed directly or indirectly by Oaktree Capital Management, L.P., (“Oaktree”). Pursuant to the Etzel Acquisition Financing Commitment, AP IX Alpha and Oaktree Funds will advance, directly or through any of their respective affiliates, to the Company or its subsidiaries an amount up to the funds needed to finance the Etzel Acquisition in the form of unsecured subordinated debt.
Each of AP IX Alpha and the Oaktree Funds are a “related party” of the Company under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), as each of AP IX Alpha and the Oaktree Funds exercises control and direction over more than 10% of the issued and outstanding common shares of the Company. The Etzel Acquisition Financing Commitment is exempt from the related party provisions of MI 61-101. Entry into the Etzel Acquisition Financing Commitment on behalf of the Company was considered and approved by the non-conflicted members of the Board of ABC Technologies.
Advisors
Blake, Cassels & Graydon LLP and Ashurst LLP are counsel to ABC Technologies. Evercore is sole financial advisor to ABC Technologies and its Board of Directors. Sparkasse Pforzeim Calw is financial advisor and Bender Harrer Krevet are counsel to Etzel. Apollo and Oaktree, through their managed funds, are investors in ABC Technologies. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Goodmans LLP are counsel to Apollo and Stikeman Elliott LLP is counsel to Oaktree in connection with the Etzel Acquisition Financing Commitment.
About Apollo
Apollo is a global, high-growth alternative asset manager. In our asset management business, we seek to provide our clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three business strategies: yield, hybrid, and equity. For more than three decades, our investing expertise across our fully integrated platform has served the financial return needs of our clients and provided businesses with innovative capital solutions for growth. Through Athene, our retirement services business, we specialize in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Our patient, creative, and knowledgeable approach to investing aligns our clients, businesses we invest in, our employees, and the communities we impact, to expand opportunity and achieve positive outcomes. As of September 30, 2021, Apollo had approximately $481 billion of assets under management. To learn more, please visit www.apollo.com.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with US$158 billion in assets under management as of September 30, 2021. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 1,000 employees and offices in 19 cities worldwide. For additional information, please visit Oaktree’s website at www.oaktreecapital.com.
About ABC Technologies
ABC Technologies is a leading manufacturer and supplier of custom, highly engineered, technical plastics and lightweighting innovations to the North American light vehicle industry, serving more than 25 original equipment manufacturer customers globally through a strategically located footprint. ABC Technologies’ integrated service offering includes manufacturing, design, engineering, material compounding, machine, tooling and equipment building that are supported by an experienced engineering team of approximately 600 skilled professionals and 6,150 employees worldwide. The Company operates in six product groups: HVAC Systems, Interior Systems, Exterior Systems, Fluid Management, Air Induction Systems, and Flexible & Other.
www.abctechnologies.com/investors