Elders has sold its automotive components supply business to Los Angeles-based private equity firm Clearlake Capital Group for $56 million in cash as the rural services company seeks to dispose of businesses it considers non-core and trims debt.
Elders managing director Malcolm Jackman told Markets Spectator the sale of Futuris Automotive will result in Elders recording a net loss of $28 million against how it values the company, which has annual revenue of $400 million.
Futuris Automotive designs and makes auto seating and interior systems for Toyota, General Motors and Ford in Australia, China and the US.
Advised by investment bank Greenhill and lawyers Herbert Smith Freehills, Elders sold Futuris Automotive after a 12-month competitive bidding process that involved a number of potential financial and trade buyers, says Jackman.
At 1254 AEST Elders shares rose by 7.6 per cent to 8.5 cents. The stock has fallen 26 per cent this year and 62 per cent in the last 12 months, according to Bloomberg data.
Forestry remains the only non-core business Elders has yet to sell and it is doing so in individual business units, says Jackman. The company, he says, will focus on proving livestock and wool broking, grain trading, proving farm supplies as well as agricultural production advice and loans. Elders also has an international trading unit.