Divestiture streamlines CVG’s focus
Important milestone in ongoing long-term growth strategy
NEW ALBANY, Ohio, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Commercial Vehicle Group (the “Company” or “CVG”) ( CVGI), a diversified industrial products and services company, today announced it reached an agreement to sell its Cab Structures business with operations in Kings Mountain, North Carolina to a Volvo Group company, effective July 31, 2024. The net proceeds of the transaction are expected to be $40 million, with closure expected in the second half of 2024. The Company expects the majority of proceeds to be used for debt paydown and other general corporate purposes.
The Cab Structures business primarily serves the Class 8 truck market. This transaction continues a trend of heavy truck OEMs insourcing their cab structure production in recent years.
James Ray, CVG President and Chief Executive Officer, said, “The strategic sale of our Cab Structures business marks another milestone on our journey to evolve our business towards higher-growth products and markets, in line with our ongoing strategic transformation plan, while simultaneously generating shareholder value. The sale of our Cab Structures business reduces our exposure to the cyclical Class 8 market, lowers our customer concentration, removes complexity from our business, and improves our return profile.”
About 230 CVG employees are expected to become employees of Volvo, as part of the transaction.
“We are very happy to see this plant in good hands,” said Mr. Ray. “Volvo brings proven operating experience. Kings Mountain employees will benefit from continuity of the plant’s operations and will have the unique opportunity to work for the OEM.”
Mr. Ray concluded, “This transaction also lowers our future capital investment needs and provides the opportunity to invest in high-growth opportunities moving forward. We will continue to closely review additional opportunities for value creation.”
CVG expects to update its full-year 2024 outlook to reflect the impact of the Cab Structures business divestiture in its second quarter 2024 earnings release expected to be released on August 5, 2024.
Company Contact
Andy Cheung
Chief Financial Officer
CVG
[email protected]
Investor Relations Contact
Ross Collins or Stephen Poe
Alpha IR Group
[email protected]
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries and communities we serve. Information about the Company and its products is available on the internet at www.cvgrp.com.
Forward-Looking Statements
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