BorgWarner sells its subsidiary Remy, Inc.; deal includes operations in Mexico
An investor group led by Torque Capital Group has signed a definitive agreement to acquire the North American and European light vehicle aftermarket business of Remy, Inc. from BorgWarner Inc., the latter announced in a press release.
The sale includes manufacturing facilities in Piedras Negras and San Luis Potosi, as well as other operations in U.S., Europe and North Africa.
The business employs a total of approximately 3,000 people. The purchase price of the transaction is approximately US$ 80 million, subject to customary adjustment. Completion of the transaction is expected in the fourth quarter, subject to the satisfaction of customary closing conditions.
Sales of this light vehicle aftermarket business through the first six months of 2016 were approximately US$ 142 million.
BorgWarner will retain the core rotating electric business of the former Remy International, Inc. to complement its focus on hybrid and electric vehicle propulsion systems. The remaining operations in Mexico are located in Ciudad Juarez, Ramos Arizpe, Irapuato and El Salto.
The transaction does not include other BorgWarner products or technologies including the Delco Remy commercial vehicle products.
As a result of the transaction, including the write-off of excess purchase price allocation related to the 2015 acquisition of the former REMY International Inc., BorgWarner estimates that it will incur a 2016 pre-tax loss of approximately US$ 95-125 million, subject to final closing adjustments.