JOHNSON CITY, Tenn.,
July 10, 2017 /PRNewswire/ -- NN,
Inc., (NASDAQ: NNBR), a diversified industrial company, today
announced it has entered into a definitive agreement to sell its
Precision Bearing Components Group ("PBC") to Tsubaki Nakashima
Co., Ltd. ("Tsubaki Nakashima"), for $375
million in cash. The transaction is expected to be completed
in the second half of 2017, and is subject to regulatory and
customary closing conditions.
The sale of PBC furthers NN's long-term strategy to build a
diversified industrial business with a comprehensive geographic
footprint in attractive high-growth market segments. NN plans to
redeploy the estimated $270 million
in net proceeds from the transaction into higher-growth,
higher-margin end markets, while also accelerating its focus on
deleveraging.
Richard Holder, President and
Chief Executive Officer, commented, "The sale of PBC represents a
key strategic step toward building a diversified industrial
business and capitalizing on growth opportunities that foster
strong operating performance, stable earnings and free cash flow
over the long term. This transaction further balances our portfolio
and provides us with the capital to execute on our strategic
expansion into the higher-growth, medical and aerospace end
markets. Importantly, we will also strengthen our balance sheet and
will now have the additional flexibility through cash on hand to
make strategic acquisitions in markets that we believe have strong
growth potential. We will continue to look for opportunities to
further diversify our business and create a more balanced portfolio
to enhance shareholder value over the long term. Finally, we
believe that Tsubaki Nakashima is the right strategic fit for PBC,
its employees and its customers. By joining with Tsubaki Nakashima,
a well-respected bearing components manufacturer with an
established track record of global growth, PBC will continue to
thrive."
Beginning in the third quarter of 2017, PBC results will be
classified as discontinued operations in NN's financial reporting.
NN reaffirms its second quarter 2017 guidance.
SunTrust Robinson Humphrey is acting as financial advisor and
Bass, Berry and Sims PLC is serving as legal advisor to NN.
Conference Call & Supplemental Deck
A supplemental presentation on the transaction has been posted
to NN's website. NN will host a conference call to discuss the
transaction on July 10 at
9:30 a.m. ET. Access the call by
dialing 888-312-9849 in the U.S., or +1-719-325-2272
internationally, conference ID: 4248297. A replay of the conference
call will be available shortly after the conclusion of the call.
The replay along with presentation materials relating to the
transaction will be available under the investor relations section
of NN's website.
NN, Inc., a diversified industrial company combines advanced
engineering and production capabilities with in-depth materials
science expertise to design and manufacture high-precision
components and assemblies for a variety of markets on a global
basis. Headquartered in Johnson
City, Tennessee, NN has 40 manufacturing plants in
North America, Western Europe, Eastern Europe, South America and China.
Except for specific historical information, many of the
matters discussed in this press release may express or imply
projections of revenues or expenditures, statements of plans and
objectives or future operations or statements of future economic
performance. These, and similar statements, including all
statements regarding the expected date of closing and potential
benefits of the transaction discussed in this press release, are
forward-looking statements concerning matters that involve risks,
uncertainties and other factors which may cause the actual
performance of NN, Inc. and its subsidiaries to differ materially
from those expressed or implied by this discussion. All
forward-looking information is provided by the Company pursuant to
the safe harbor established under the Private Securities Litigation
Reform Act of 1995 and should be evaluated in the context of these
factors. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "assumptions",
"target", "guidance", "outlook", "plans", "projection", "may",
"will", "would", "expect", "intend", "estimate", "anticipate",
"believe", "potential" or "continue" (or the negative or other
derivatives of each of these terms) or similar terminology. Factors
which could materially affect actual results include, but are not
limited to: the occurrence of any event, change or other
circumstance that could delay the closing of the transaction, the
possibility that the transaction may not be completed and the
termination of the definitive agreement, the failure to satisfy any
of the conditions to the transaction as set forth in the definitive
agreement, any adverse effect on the Company's stock due to the
failure to complete the proposed transaction, potential business
disruptions due to transaction-related uncertainty or otherwise
related to the effects of the transaction and the separation of the
PBC business from our other businesses, including our relationships
with affected employees, vendors and customers, costs related to
the transaction, and the possibility that we will be unable to
execute on our intended redeployment of net proceeds from the
transaction, whether due to a lack of favorable investment
opportunities or otherwise, as well as general economic conditions
and economic conditions in the industrial sector, inventory levels,
regulatory compliance costs and the Company's ability to manage
these costs, start-up costs for new operations, debt reduction,
competitive influences, risks that current customers will commence
or increase captive production, risks of capacity underutilization,
quality issues, availability and price of raw materials, currency
and other risks associated with international trade, the Company's
dependence on certain major customers, and the successful
implementation of the global growth plan including development of
new products. Similarly, statements made herein and elsewhere
regarding completed acquisitions are also forward-looking
statements, including statements relating to the future performance
and prospects of an acquired business, the expected benefits of an
acquisition on the Company's future business and operations and the
ability of the Company to successfully integrate recently acquired
businesses.
For additional information concerning such risk factors and
cautionary statements, please see the section titled "Risk Factors"
in the Company's periodic reports filed with the Securities and
Exchange Commission, including, but not limited to, the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Except as required by law, we
undertake no obligation to update or revise any forward-looking
statements we make in our press releases, whether as a result of
new information, future events or otherwise.
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SOURCE NN, Inc.