BorgWarner Sells Water Valley, Mississippi Facility to Atar Capital

Rhea-AI Summary

BorgWarner has completed the sale of its Water Valley, Mississippi facility to Atar Capital as part of its Project Charging Forward, aiming to divest $3-$4 billion in revenues from its combustion portfolio by 2025. This facility generated approximately $180 million in sales for 2021. The total consideration for the sale amounts to $42 million in cash and notes, with potential earn-out payments of up to $30 million. While the company anticipates incurring a non-material GAAP loss from the sale, this move aligns with BorgWarner’s electrification strategy.

Positive

• The sale aligns with Project Charging Forward, BorgWarner's electrification strategy.
• The divestiture helps BorgWarner target $3-$4 billion in annual revenue disposals by 2025.

Negative

• The company expects to incur a U.S. GAAP loss on the sale, although it is not expected to be material.

AUBURN HILLS, Mich., Jan. 5, 2022 /PRNewswire/ -- BorgWarner Inc. ("BorgWarner") has sold its Water Valley, Mississippi facility to Atar Capital. The sale is consistent with Project Charging Forward, BorgWarner's accelerated electrification strategy which the Company announced in March 2021. Outlined in this strategy is a target to dispose of $3 billion to $4 billion in annual revenues from its combustion portfolio by 2025 with approximately $1 billion of that targeted to be executed by late 2022.  

The Water Valley sale encompasses the manufacturing facility and the associated solenoid, transmission control module and stop/start accumulator system business located there. Full year sales of the Water Valley business for 2021 are expected to be approximately $180 million. The transaction was completed on December 31, 2021. The consideration consisted of $42 million in cash and notes and up to $30 million in potential earn out payments. The Company expects to incur a U.S. GAAP loss on the sale, which is not expected to be material.

About BorgWarner
BorgWarner Inc. (NYSE: BWA) is a global product leader in delivering innovative and sustainable mobility solutions for the vehicle market. Building on its original equipment expertise, BorgWarner also brings market-leading product and service solutions to the global aftermarket. With manufacturing and technical facilities in 96 locations in 22 countries, the company employs approximately 50,000 people worldwide. For more information, please visit borgwarner.com.

Forward-Looking Statements:  This press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. In particular, the statements concerning the Company's divestiture targets are forward-looking statements. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include the ability to identify appropriate combustion portfolio businesses for disposition and consummate planned dispositions on acceptable terms; uncertainties regarding the extent and duration of impacts of matters associated with the COVID-19/coronavirus pandemic; the uncertainty of the global economic environment; and the other risks, including, by way of example, pandemics and quarantines, noted in reports that we file with the Securities and Exchange Commission, including Item 1A, "Risk Factors" in our most recently-filed Annual Report on Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this press release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

 

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SOURCE BorgWarner

FAQ

What was the amount of the consideration for the Water Valley facility sale by BorgWarner (BWA)?

The total consideration for the sale was $42 million in cash and notes, plus up to $30 million in potential earn-out payments.

What is the significance of the Water Valley facility sale for BorgWarner (BWA)?

The sale is part of BorgWarner's Project Charging Forward, aimed at divesting $3-$4 billion in revenues from its combustion portfolio by 2025.

What were the expected sales for the Water Valley facility in 2021?

The expected sales for the Water Valley facility in 2021 were approximately $180 million.

When was the sale of the Water Valley facility completed?

The sale was completed on December 31, 2021.

What is BorgWarner's (BWA) target for its divestments by late 2022?

BorgWarner targets to execute approximately $1 billion of the divestiture from its combustion portfolio by late 2022.