Dana Incorporated has announced it is preparing to sell its Off-Highway business division as part of a broader strategic transformation of the company. The automotive parts manufacturer has engaged Goldman Sachs and Morgan Stanley to handle the sale process.
The Off-Highway division, which produces drive and motion systems for heavy-duty vehicles used in agriculture, construction, mining, and forestry, represents a significant portion of Dana’s business. The company says the sale will allow it to focus on its light and commercial vehicle operations while strengthening its balance sheet through debt reduction.
The announcement comes alongside a leadership transition, with R. Bruce McDonald, a current board member, stepping in as chairman and CEO following the retirement of James Kamsickas. McDonald, a former chairman and CEO of Adient plc with over 30 years of industry experience, will lead the company while a search for a permanent CEO is conducted.
“Dana is committed to a strategy that accelerates value creation,” says McDonald. “Following the Off-Highway business sale, we believe Dana will have an adjusted EBITDA margin and free cash flow margin in excess of current levels.”
The company also revealed plans for a $200 million cost-reduction program to be implemented by 2026, which includes cuts to administrative costs and engineering expenses. Dana cited ongoing delays in electric vehicle adoption as one factor driving the need for reduced engineering spending.
Despite these changes, Dana reaffirmed its 2024 guidance, projecting sales between $10.2 and $10.4 billion, with adjusted EBITDA of $855 to $895 million and free cash flow of $90 to $110 million.
The company noted that while there appears to be strong interest in the Off-Highway business, there is no guarantee the sale will be completed, and no timeline has been set for the conclusion of the process.
