Tower Gets IPO Launched (TOWR)

Tower International, Inc. (NYSE: TOWR) is about to be public.  The former Tower Automotive supplies welded assemblies, body structure stampings, frames, and other auto structures.  Tower has also entered the utility-scale solar energy market, after signing on to supply large stamped panels and support structures.  This morning’s IPO priced 6.25 million shares of common stock at $13.00 per share.  It is worth noting that despite a strong market this is a  disappointing price as the range was initially $15.00 to $17.00 per share.

Joint book-runners were Goldman Sachs, Citigroup, and J.P. Morgan; the three co-managers were listed as Wells Fargo, Baird, and Lazard Capital Markets.  The underwriters have a 30-day over-allotment option to purchase up to an additional 937,500 shares.

Tower’s 2009 revenues were $1.6 billion with a net loss of $67.9 million. In February 2005, Tower filed for bankruptcy protection as many auto part and structure companies were in trouble.  In July 2007, Tower completed the sale of substantially all assets to private equity firm Cerberus Capital and emerged from bankruptcy court protection.  Cerberus will still own approximately two-thirds of Tower after today’s IPO.  So in short, this has been there before and this time it has a private equity parent.

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JON C. OGG