Commercial Vehicle Group Completes Sale of FinishTEK Business to Rowmark LLC
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The divestiture of FinishTEK by Commercial Vehicle Group (CVG) to Rowmark LLC marks a strategic portfolio optimization for CVG. This move aligns with CVG's broader strategy to focus on revenue growth in its electrical systems business and margin improvement. Divestitures are a common strategy for companies looking to streamline operations and concentrate on core competencies, which can lead to a more efficient allocation of resources and potentially higher profitability.
For stakeholders, the short-term implications may include a potential shift in the company's revenue streams and a possible one-time gain from the sale. Long-term implications could involve a strengthened focus on the electrical systems business, which may drive innovation and market share growth. This strategic realignment may also signal CVG's anticipation of growth opportunities or competitive challenges within the vehicle components sector.
While the financial terms of the transaction were not disclosed, the sale of a business unit can have several financial implications for CVG. It could result in an immediate influx of cash, which can be used for debt reduction, reinvestment in core areas, or returned to shareholders. The divestiture may also affect CVG's financial statements, potentially leading to a leaner balance sheet and improved financial ratios. Investors and analysts may view this transaction as an indicator of CVG's financial prudence and strategic focus, which could influence stock market performance.
From a legal perspective, the sale of FinishTEK requires careful consideration of the transition for customers, suppliers and employees. Ensuring a smooth transition involves legal due diligence, the transfer of contracts and compliance with employment laws. It is essential that both CVG and Rowmark manage the legal aspects effectively to prevent any disruptions that could affect business continuity and stakeholder confidence. The undisclosed terms suggest a private agreement, which is typical in such business transactions to protect competitive and strategic interests.
NEW ALBANY, Ohio, Feb. 01, 2024 (GLOBE NEWSWIRE) -- Commercial Vehicle Group (CVG) (NASDAQ: CVGI), a global leader in the design and manufacturing of electrical systems, vehicle components and accessories, plastic products and robotic assemblies, today announced that it has sold its FinishTEK business to Rowmark LLC, effective January 31, 2024.
Based in Dalton, Ga., FinishTEK, is a hydrographic and paint decorator with 95,000 square feet of specialized manufacturing and warehouse space and 30 employees. FinishTEK was part of CVG’s Vehicle Solutions segment serving Tier 1 suppliers and OEM manufacturers in a wide variety of industries, including powersports, heavy-duty truck, appliance, automotive, turf, construction, and agriculture. Rowmark, based in Findlay, Ohio, is a leading manufacturer of engravable sheet plastic for the awards, engraving and signage markets.
James Ray, President and CEO of CVG, stated, “As part of our strategy to drive revenue growth, primarily in our electrical systems business and improve our margins, we continually evaluate our portfolio of businesses and product lines for strategic fit and continued investment. This is a positive transaction for both companies and continues to optimize CVG’s portfolio toward its core growth businesses.”
CVG and Rowmark are committed to a smooth transition for our customers, suppliers, and the employees. The terms of the agreement were not disclosed.
About FinishTEK
FinishTEK was founded in 1993 as Daltek Inc. It was acquired by Commercial Vehicle Group in 2012 and renamed FinishTEK. FinishTEK is a hydrographic and paint decorator specializing in plastics decorating and finishing. It offers customers a wide variety of cost-effective finishes in hydrographics, paint, and UV hard coating.
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. Information about CVG and its products is available at www.cvgrp.com.
Investor Relations Contact:
Ross Collins or Stephen Poe
Alpha IR Group
CVGI@alpha-ir.com
Media Contact:
Patrick Woolford
Director, Communications
Patrick.Woolford@cvgrp.com
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