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Morgan Firestone has agreed to sell his controlling interest in Canadian RV manufacturer Glendale International Corp. to a group of senior managers, including Glendale RV President Terry Mullan.
Firestone, 73, is the grandson of the founder of the auto and truck tire manufacturer that is now owned by a Japanese firm that continues to use the Firestone brand name.
He founded Firan Corp., Glendale’s predecessor, but has not held a senior management position the last few years.
Firestone controlled Glendale through G.P. Metal Products, another company he controls. Under the terms of the transaction, G.P. Metal will sell 5 million Glendale shares to the senior management group for $26.39 million (Canadian), or $5.28 a share (Canadian).
One Canadian dollar now is worth almost 74 cents in U.S. currency.
Glendale, a Toronto Stock Exchange-listed company, most recently traded for $5.90 (Canadian) a share.
The management group had owned 650,000 Glendale shares. Their new stake of 5,650,000 shares will amount to 45% of all of Glendale’s outstanding shares.
Edward Hanna, Glendale’s chairman, president and CEO, is buying 31% of G.P. Metal’s 5 million shares and Mullan is buying 26%. The other Glendale senior managers are buying 10.75% of the 5 million shares.
Firestone and Glendale senior management had been in discussions for about a month because Firestone decided “the interests of the corporation, its shareholders, employees and other stakeholders would be best served if he (Firestone) were to relinquish control of the corporation and sell his share position to the corporation’s senior management group,” according to a Glendale statement.
“Building on a vision that Mr. Firestone started more than 30 years ago, the entire management team is excited to lead the company into a new phase of growth,” Hanna said.
The senior managers will borrow from various sources to pay for the 5 million shares. Glendale will guarantee $5 million (Canadian) of the debt, plus unpaid interest and costs.
Glendale also plans to pay a special $1 a share (Canadian) cash dividend on Aug. 11 to all shareholders. However, a committee comprising members of the Glendale Board who are not Glendale employees will review the advisability of paying the special dividend.
Glendale is the largest Canadian-headquartered RV manufacturer. It also has subsidiaries involved in avionics, electronic components and plastics.