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Iochpe-Maxion wheels Hayes Lemmerz on board

by Lou Whiteman  |  Published October 7, 2011 at 11:25 AM
Carwheel_227x128.gifBrazilian auto parts manufacturer Iochpe-Maxion SA said late Thursday, Oct. 6, it plans to acquire Hayes Lemmerz International Inc. of Michigan in a $725 million deal designed to create a global wheelmaking powerhouse.

Terms of the deal call for São Paulo-based Iochpe-Maxion to pay $702 million for Hayes, and assume $23 million in debt. Northville Township-based Hayes Lemmerz operates 17 plants worldwide, with the capacity to manufacture 63.4 million wheels annually.

Combined with Iochpe-Maxion's existing wheel business, the merged company would operate manufacturing facilities in 13 countries across the globe. Iochpe-Maxion chief executive Dan Ioschpe in a statement said the deal "will position us well to partner with customers to offer technologically advanced products and outstanding services to meet their needs in every major geographic region for years to come."

The deal, which is expected to close in the first half of next year subject to shareholder and regulatory approval, would mark a final chapter in what has been a rocky run for Hayes Lemmerz. The company in 2009 emerged from its second stay in Chapter 11 protection in six years under a plan that allowed its creditors to swap their debt for new equity. Under the plan, prepetition secured lenders led by Deutsche Bank AG and GE Capital that provided $200 million in debtor-in-possession financing were able to convert $100 million in rolled-up prepetition loans into 84.5% of the new company's equity.

Hayes Lemmerz, which calls itself the world's largest wheel producer, originated in 1908 and produces wheels for customers including Ford Motor Co., General Motors Co., Renault-Nissan BV, Toyota Motor Corp., Chrysler Group LLC, BMW AG, Porsche AG and Volkswagen AG.

Iochpe-Maxion is a $1.3 billion-sales manufacturer of auto parts and rail equipment with operations primarily in Brazil. The company has been venturing abroad in recent years, in 2009 acquiring the wheel manufacturing unit of ArvinMeritor Inc. of the U.S. for $180 million.

Hayes Lemmerz was advised by Houlihan Lokey Inc. and a Skadden, Arps, Slate, Meagher & Flom LLP team including Robert Pincus, James Keyte, Stuart Alperin, André LeDuc and Frederic Depoortere. A Dewey & LeBoeuf LLP team led by Denise Cerasani advised Houlihan. A Proskauer Rose LLP team led by Daniel I. Ganitsky that included Joseph J. Giunta, Andrew H. Kleiman, Alan P. Parnes, Colin Kass, Andrea S. Rattner, Joshua Miller and David Fenwick advised Iochpe-Maxion.



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Tags: bankruptcy | Brazil | Hayes Lemmerz International Inc. | Iochpe-Maxion SA | M&A | middle market

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