Troy, Mich.-based Horizon Global Corp., a manufacturers of branded towing and trailering equipment, announced that the company has entered into a definitive agreement to sell its Asia-Pacific (APAC) business segment to Pacific Equity Partners (PEP) for $340 million (Australian dollars) in cash, subject to customary closing adjustments. According to a press release, the company intends to use the proceeds from the sale to significantly reduce its debt and bolster its liquidity, allowing for additional financial flexibility.

Upon completion of the sale and subsequent retirement of debt, Horizon Global intends to pursue a full or partial refinancing of its remaining secured debt. If successful, it is expected that this refinancing would close in the fourth quarter of 2019.

President and Chief Executive Officer Carl Bizon commented, “We are pleased with the outcome of the sale process. While the proceeds from this sale will allow us to satisfy the $100 million prepayment obligation under our First Lien Term Loan, we expect to make additional debt repayments substantially in excess of this amount. This transaction also simplifies our operating structure, allowing us to deepen our focus on our remaining operating segments, which we believe can be restored to historical profitability levels.

Andrew Charlier, a managing director of PEP, added, “APAC is led by an outstanding management team and has a track record of developing innovative products and solutions for its customers. We are excited to support management by investing in product development, geographical expansion, and the potential acquisition of additional brands in order to continue to deliver quality products and service to our customers.”

The transaction is subject to the satisfaction of customary closing conditions and is expected to close before the end of the third quarter of 2019.