Coliseum Capital says opposes Accuride's proposed sale to Crestview affiliates
Coliseum Capital Management, the largest shareholder of Accuride Corporation with an ownership of approximately 19% of the outstanding stock, announced that it has sent a letter to the Accuride Board of Directors stating its strong opposition to Accuride's agreement to be acquired by funds managed by Crestview Partners for $2.58 per share. Coliseum says, "We believe this transaction materially undervalues the Company, is the wrong strategic choice for Accuride and is not in the best interests of shareholders. We will be voting against the transaction... Now is the wrong time to sell Accuride. The Company has made substantial investments over the past five and a half years, spending over $150 million to upgrade manufacturing facilities and successfully restore its customer relationships. We believe that the truck market is at a cyclical low, but when the cycle turns the Company will be well-positioned to harvest the benefits of the hard work and investment. Shareholders who patiently supported these investments should participate in the upside. Accuride's prospects as an independent company are strong. The Company's own projections forecast 2018 Adjusted EBITDA of $98 million. Using the Company's blended Total Enterprise Value multiple of 5.5x produces a conservative valuation of $5.00 per share, which equates to a 94% return over the next two years. Furthermore, these projections do not incorporate any material deleveraging or additional value contributed by acquisitions, which could further enhance returns - benefits that would be captured by Crestview as a result of the transaction... Specifically, we believe the Company should consider a modest public equity raise from current shareholders in order to facilitate refinancing its senior notes, as well as pursue growth initiatives through strategic acquisitions. We do not believe the current debt balance is untenable. Additionally, we believe there are numerous actionable, value-enhancing acquisition opportunities ranging from Asian sourcing capacity to European footprint expansion."