Yahoo Finance TriMas (TRS) Shares Rise on Completion of Cequent Spinoff - Analyst Blog
Shares of TriMas Corporation TRS went up 0.7% following the completion of the earlier announced tax-free spin-off of its Cequent businesses. Effective tomorrow, the newly formed company, Horizon Global Corporation will begin trading as an independent public company on the NYSE under the symbol “HZN.”
The process has been ongoing since Dec 2014 when TriMas announced that its Board has approved the decision to spin off its truck and trailer accessories unit, Cequent, into a new stand-alone, publicly traded company. The move reflected TriMas’ continued commitment toward enhancing shareholder value through active management of business portfolio and organizational focus.
At the close of business yesterday, TriMas shareholders received two common shares of Horizon Global for every five common shares of TriMas held at the close of business on the record date of Jun 25, 2015.
Horizon Global (formerly Cequent) will design, manufacture and distribute a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products on a global basis. It will cater to the automotive aftermarket, retail and original equipment channels. Horizon Global will comprise TriMas’ Cequent Americas and Cequent APEA segments, which together generated revenue of more than $600 million in 2014, with a 10% compound annual growth rate from the end of 2010 through 2014.
Horizon Global will employ approximately 2,800 people at 20 facilities across the world. Its management team, including A. Mark Zeffiro, president and chief executive officer, and David Rice, chief financial officer, will be based in its headquarters in Bloomfield Hills, MI.
After the spinoff, TriMas will contain the Packaging, Aerospace, Energy and Engineered Components segments. The spinoff will provide both TriMas and Horizon Global greater flexibility allowing each to focus on their distinct growth and margin improvement strategies. This in turn will increase efficiency and help to generate value for shareholders, customers and employees.
However, headwinds arising from continued low oil prices and a stronger U.S. dollar, as well as lower-than-expected macroeconomic growth will continue to dent Trimas’ revenues. Nevertheless, the company remains focused on its ongoing initiatives to drive margin improvement across its businesses by optimizing its manufacturing footprint, exiting lower margin products and geographies, and achieving synergies from previous acquisitions.
TriMas currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space are Global Brass and Copper Holdings, Inc. BRSS, AB SKF SKFRY and Owens Corning OC. All of these stocks carry a Zacks Rank #2 (Buy).
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