Hankook invests in Korean climate control auto supplier

Van Buren Township, Michigan — Automotive supplier Visteon Corp. has agreed to sell its ownership stake in a South Korean supplier of automotive climate control systems to an investor consortium that includes Hankook Tire Co. Ltd.

Visteon, based in Van Buren Township,  said it had agreed to sell approximately 70 percent of its stake in Halla Visteon Climate Control Corp. (HVCC) to an affiliate of Hahn & Co. — a South Korea-based private equity company — and Hankook Tire Co. Ltd. for about $3.6 billion.

The transaction, which is subject to regulatory reviews, shareholder approval and other conditions, is expected to be completed in the first half of 2015.

Hankook has yet to make a statement explaining its reasons for getting involved in this deal.

Hahn & Co. CEO Scott Hahn described the acquisition as an “excellent fit within our existing portfolio and strategy. Customers of HVCC will continue to benefit from its globally renowned technology solutions, highly respected management team, strong balance sheet, dedication to innovation and expanding global market presence.

“Together in partnership with Hankook Tire, we believe we can help HVCC expand its customer base and global reach and further improve upon HVCC's operating efficiency and technological expertise. Both of our firms are confident that the current management team of HVCC will continue to deliver excellence to its customers, its employees and to its shareholders.”

Neither Visteon, Hahn & Co. nor Hankook disclosed the breakdown of the Hahn/Hankook ownership structure.

HVCC is described as a full-line supplier of automotive thermal management solutions. Products include heating ventilation and air conditioning; compressors; powertrain cooling; fluid transport; and electric, hybrid and fuel-cell vehicle thermal systems.

It maintains 36 manufacturing sites and four global technical centers in 19 countries; employment is 15,500.

The transaction represents an enterprise value for HVCC of approximately 10.1 times EBITDA for the 12 months ended 30 Sept, Visteon said. HVCC is traded on the Korea Stock Exchange (KS: 018880)

Visteon management will provide greater details on the transaction on 13 Jan 2015, at the Deutsche Bank 2015 Global Auto Industry Conference in Detroit.