Wabash National Corp. and Jefferies Capital Partners have announced plans to sell all of the assets of Wabash National’s APEX trailer leasing and rental and wholesale aftermarket parts distribution businesses to Aurora Trailer
Holdings LLC.
The transaction is expected to close during the third quarter of 2003 and is subject to lender approval, buyer financing and Federal Trade Commission approval under the Hart-Scott-Rodino Act.
Meanwhile, the Indiana trailer manufacturer announced its net loss for the second quarter was $27 million, including a $29 million non-cash charge related to planned asset divestitures. That compares with a net loss of $22 million for the same period last year.
Wabash National’s net sales for the second quarter were $230 million compared to $210 million for the same period last year.
Wabash National expects to receive about $65-$70 million from the sale to Aurora, of which $55 million will be paid in cash upon closing.
In connection with the transaction, Wabash and Aurora have entered into long-term arrangements for the supply of parts by Aurora to Wabash's factory-owned branches and the supply of new and used trailers and maintenance services by Wabash to Aurora.
Commenting on the sale, Mark R. Holden, senior vice president and chief financial officer of Wabash said, "As a result of this transaction, Wabash will record a $29 million asset impairment charge during the second quarter of 2003 to reflect the planned sale of these assets at below book value. This non-cash charge will not affect the company's compliance under its existing bank covenants. Upon closing this transaction, all proceeds from this divestiture will go toward debt retirement which, including this amount will total approximately $90 million year-to-date."
Aurora is a company formed by Jefferies Capital Partners and former and current members of the business' management teams. Derek Nagle, who most recently served as president of several Wabash businesses with revenues of more than $300 million, including the two businesses being acquired, will serve as president and CEO of Aurora. Nagle has extensive experience in the truck trailer industry, including the manufacturing, rental, leasing, retail and aftermarket parts segments.
Wabash National Corp. designs, manufactures and markets standard and customized truck trailers under the Wabash brand name. The company is one of the world's largest manufacturers of truck trailers and a leading manufacturer of composite trailers.