KPS TO PARTICIPATE IN COMPANY'S DIP FINANCING TO SUPPORT
OPERATIONS
KPS HAS OBTAINED COMMITTED EXIT FINANCING
NEW YORK, Sept. 21, 2020 /PRNewswire/ -- KPS Capital
Partners, LP ("KPS") announced today that, through a newly formed
affiliate, it has entered into a stock and asset purchase agreement
with Garrett Motion Inc. (NYSE: GTX) ("Garrett" or the
"Company"), under which KPS will acquire substantially
all of the assets of Garrett for approximately $2.1 billion.
Garrett will file a motion with the United States Bankruptcy
Court for the Southern District of New
York today seeking the designation of KPS as the "stalking
horse bidder" in a bidding procedures motion in connection with the
Company's filing of voluntary petitions under Chapter 11 of the
Bankruptcy Code. KPS was selected by Garrett after a
comprehensive review of strategic alternatives by the Company's
Board of Directors. To facilitate the sale process, Garrett
has begun a process in the United
States to financially restructure through a voluntary
Chapter 11 proceeding. The completion of the sale is subject
to court approval, among other customary conditions. KPS
currently expects the sale process to be completed in early
2021.
KPS, through an affiliate, has also agreed to participate in
Garrett's Debtor in Possession ("DIP") financing to support the
Company's operations. Following court approval, the DIP
facility will ensure that Garrett has sufficient liquidity to
continue normal operations and continue to meet its financial
obligations during the Chapter 11 process, including the timely
payment of employee wages and benefits, continued servicing of
customer orders and shipments, and other obligations.
A syndicate of banks including Citi, UBS Investment Bank, Credit
Suisse and BNP PARIBAS, have committed to provide exit financing to
the KPS stalking horse acquisition vehicle to acquire Garrett.
The exit financing is subject to completion of the
acquisition and customary closing conditions.
Raquel Vargas Palmer, Managing
Partner of KPS, said, "We proceed with great conviction and
enthusiasm to acquire Garrett, a global leader in turbocharger and
electrification technologies, serving nearly every major automotive
and commercial vehicle OEM in the world. Garrett enjoys a
leading market position, scale, world class research and
development sites, and state-of-the-art manufacturing and
engineering facilities strategically located around the
globe. We look forward to working with the Company's
leadership team and employees to accelerate its many attractive
growth opportunities as well as increase its already substantial
investment in research and development, technology and new product
development.
"KPS has invested an enormous amount of effort, resources and
capital to acquire Garrett. We are committed to the expeditious
acquisition of Garrett to provide certainty of outcome and
confidence in the new Company's future for all of its stakeholders,
including customers, employees and suppliers. The Company and
its stakeholders will benefit from KPS' demonstrated track record
and decades long history of successfully investing in the
automotive and transportation industries globally, commitment to
manufacturing excellence, continuous improvement and access to our
significant financial resources. The new Garrett will be
conservatively capitalized and not encumbered by its predecessor's
significant liabilities."
UBS Investment Bank and Credit Suisse are acting as financial
advisors, and Davis Polk &
Wardwell LLP is acting as legal counsel to KPS with respect to the
transaction.
About Garrett Motion Inc.
Garrett, headquartered in Rolle, Switzerland, is a differentiated technology
leader, serving customers worldwide for more than 65 years with
passenger vehicle, commercial vehicle, aftermarket replacement and
performance enhancement solutions. Garrett's cutting-edge
technology enables vehicles to become safer, and more connected,
efficient and environmentally friendly. Our portfolio of
turbocharging, electric boosting and automotive software solutions
empowers the transportation industry to redefine and further
advance motion. For additional information, please visit
www.garrettmotion.com
About KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager
of the KPS Special Situations Funds, a family of investment funds
with over $11.5 billion of assets
under management (as of June 30,
2020). For over two decades, the Partners of KPS have worked
exclusively to realize significant capital appreciation by making
controlling equity investments in manufacturing and industrial
companies across a diverse array of industries, including basic
materials, branded consumer, healthcare and luxury products,
automotive parts, capital equipment and general
manufacturing. KPS creates value for its investors by working
constructively with talented management teams to make businesses
better, and generates investment returns by structurally improving
the strategic position, competitiveness and profitability of its
portfolio companies, rather than primarily relying on financial
leverage. The KPS Funds' portfolio companies have aggregate annual
revenues of approximately $7.7
billion, operate 146 manufacturing facilities in 26
countries, and have approximately 26,000 employees, directly and
through joint ventures worldwide. The KPS investment strategy and
portfolio companies are described in detail at www.kpsfund.com.
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