Avon Automotive completes refinancing, recapitalization

CADILLAC, Mich., Feb. 17 - Avon Automotive Holdings Inc. and its subsidiaries have completed a refinancing and recapitalization that substantially reduces the company’s debt and improved its capital structure.  Avon Automotive was advised on this transaction jointly by Lincoln Partners Advisors LLC (an affiliate of Lincoln International LLC) and Huron Consulting Group.

As part of the recapitalization, Crystal Capital of Boston, Mass. contributed new equity and becomes the majority equity holder by acquiring the shares held by Red Diamond Capital and MC Capital Inc. The senior loan syndicate, led by Jefferies Finance LLC, amended its existing loans to provide for increased borrowing availability and reduced amortization. Red Diamond Capital, MC Capital Inc. and Jefferies Finance LLC are all based in New York. Additionally, support from major customers in North America and Europe contributed to the execution of the recapitalization. 

“This recapitalization provides us with a significantly improved balance sheet and is an integral part of our strategy to meet the challenges faced by our industry,” said Lee Richards, president and CEO of Avon Automotive. “We very much appreciate the enormous support from our customers, lenders, equity owners and suppliers, along with important sacrifices by our employees.”

“While market conditions continue to be challenging, we have gained significant new business that will be launched across the company in 2009,” said William Dircks, CFO of Avon Automotive. “This will enable growth of the business as the market recovers.”

“We are pleased to support this management team that is respected by its customers and has done a phenomenal job over the past two years optimizing operations and rightsizing the balance sheet,” said Josh Franklin, director of Crystal Capital. “Avon Automotive is now very well positioned to grow organically and consolidate its leading position in the flexible hose sub-sector of the global automotive industry.”

Headquartered in Cadillac, Mich., Avon Automotive is a leading global supplier of low-pressure hoses for air-induction, fuel and coolant systems. The company serves a diversified customer base within the automotive, heavy truck, small engine and recreational vehicle markets. Avon Automotive generated annual revenues of approximately $240 million in 2008 at 10 manufacturing facilities in eight countries. The company has more than 2,400 employees.

About Lincoln International
Lincoln International specializes in merger and acquisition services, debt advisory services, UK pension advisory services and providing fairness opinions and valuations for leading organizations involved in mid-market transactions. With offices in Chicago, Frankfurt, London, Los Angeles, Madrid, New York, Paris, Tokyo and Vienna, and strategic partnerships with China Everbright in China and ICICI Securities, Inc. in India, Lincoln International has strong local knowledge and contacts in the key global economies. The organization provides clients with senior-level attention, in-depth industry expertise and integrated resources. By being focused and independent, Lincoln International serves its clients without conflicts of interest. More information about Lincoln International can be obtained at www.lincolninternational.com

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