Cerberus Drives an IPO for Tower Automotive

The company is an integrated global manufacturer of auto supplies, such as body-structure stampings, frame chassis structures and complex welded assemblies. Interestingly enough, the company is now providing its products for the utility-scale solar energy market, which should be a good source of growth.

Over the past couple years, Tower has made great strides in realizing savings, in terms of cost cuts, plant reductions and the use of Lean Six Sigma strategies. In fact, last year the company achieve 7.6% adjusted EBITDA margins. Actually, Tower tracks cash flow on a daily basis and bonuses are tied to this metric.

While Tower is still conservative about the growth prospects in 2010, the firm believes that there should be a healthy recovery over the next three to five years. And the company will have the right cost structure to benefit from this trend. It also helps that Tower has a good foothold in markets like Brazil and China.

The lead underwriters on the IPO include Goldman Sachs (GS) and Citigroup (C).

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.