Dana Inc. Finishes Sale of Off-Highway Division

Dana Incorporated has successfully finalized the sale of its Off-Highway unit to Allison Transmission Holdings, Inc. for $2.7 billion, in its effort to streamline operations and focus on serving light- and commercial-vehicle customers with traditional and electrified systems.

R. Bruce McDonald, Chairman and Chief Executive Officer of Dana, emphasized the significance of this transaction, marking a vital step in Dana’s strategic transformation. The sale will enhance Dana’s financial position, ultimately minimizing debt by around $2 billion and enabling the company to reach a sustainable net leverage of 1x throughout the business cycle. Moreover, shareholders are set to benefit as Dana plans to allocate $1 billion for distributions through 2027, with $650 million already returned since the announcement of the transaction.

Dana acknowledges the dedication and proficiency of its Off-Highway employees, recognizing their role in developing a world-class organization, while expressing confidence in their future within Allison. Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Ernst & Young LLP played critical roles as advisors in facilitating the transaction.

In noting the non-GAAP financial measure of Adjusted EBITDA, Dana clarified its definition as net income before various financial components unrelated to core operations. This metric is instrumental in evaluating performance, investment strategies, and incentive compensation decisions. Adjusted EBITDA aids in gauging Dana’s financial standing and is commonly used in scrutinizing the company’s financial performance alongside other Tier 1 automotive suppliers.

Dana refrains from reconciling Off-Highway adjusted EBITDA with GAAP measures due to the complexities and uncertainties involved in projecting non-core operational items like restructuring actions, asset impairments, and income tax adjustments, as reflected in the most recent financial disclosures.

By selling the Off-Highway business, Dana looks to fortify its operational focus and refine its business strategy to better cater to the evolving needs of its target markets. This divestiture underscores the company’s commitment to enhancing financial resilience, boosting profitability, and fostering innovation and growth moving forward.