Investor Volkswagen Truck & Bus also agrees to collaborative alliance
By Devika Patel
Knoxville, Tenn., Sept. 6 – Navistar International Corp. arranged a $255.97 million private placement of stock with Volkswagen Truck & Bus on Sept. 5, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
The company will sell 16,242,012 common shares at $15.76 per share. The price per share reflects a 12.01% premium to the Sept. 2 closing share price of $14.07. The purchase price is also a 25% premium over Navistar’s 90-day volume weighted average price as of Aug. 31, the company noted in a press release.
The sale is being conducted in connection with a strategic alliance with Volkswagen Truck & Bus which will enable Navistar to offer customers expanded access to leading-edge products and services through collaboration on technology and the licensing and supply of Volkswagen Truck & Bus’s products and components.
The company expects the alliance to be accretive beginning in the first year, and for cumulative synergies for Navistar to ramp up to at least $500 million over the first five years. By year five, it expects the alliance will generate annual synergies of at least $200 million for Navistar. This annual run rate is expected to grow materially thereafter as the companies continue to introduce technologies from the collaboration.
On Sept. 5, 2016, Michael N. Hammes and James H. Keyes each announced their retirement from the company’s board, effective upon the earlier to occur of the settlement of the placement and Navistar’s 2017 Annual Meeting of Stockholders. Hammes is chairman of the Nominating & Governance Committee and a member of the Finance Committee and Keyes is chairman of the board, chairman of the Audit Committee and a member of the Finance Committee.
Navistar is a Lisle, Ill.-based manufacturer and seller of commercial and military trucks, buses, and diesel engines, and a provider of service parts for trucks and trailers.
| Issuer: | Navistar International Corp.
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| Issue: | Common stock
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| Amount: | $255,974,109
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| Shares: | 16,242,012
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| Price: | $15.76
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| Warrants: | No
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| Investor: | Volkswagen Truck & Bus
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| Pricing date: | Sept. 5
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| Settlement date: | Sept. 25
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| Stock symbol: | NYSE: NAV
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| Stock price: | $14.07 at close Sept. 2
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| Market capitalization: | $1.7 billion
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