- MSA Safety ( NYSE: MSA ) has divested a wholly owned subsidiary that holds legacy product liability claims relating to coal dust, asbestos, silica, and other exposures, to a joint venture between R&Q Insurance Holdings and Obra Capital.
- The move simplifies balance sheet and strengthens cash flow profile and positions MSA Safety for long-term growth and profitability.
- R&Q and Obra have assumed management of the divested subsidiary, including the management of its claims.
- The divestiture reduces MSA Safety's risk profile, as claims were subject to inherent risks and uncertainties.
- MSA Safety sold 100% of the equity of the divested subsidiary to a joint venture between R&Q and Obra.
- In connection with the closing, the parties contributed a total of $376M in cash and cash equivalents. MSA Safety contributed $341M, and the joint venture contributed an additional $35M.
- MSA Safety financed its contribution through available cash and borrowings, including a new $250M term loan facility.
- Pro forma for the transaction as of September 30, 2022, MSA Safety's Net Debt to Adjusted EBITDA is 2.4x.
- The deal closed on January 5, 2023.
- MSA Safety expects the transaction to be recognized in its 1Q23 results.
For further details see:
MSA Safety divests from its subsidiary holding legacy liabilities