ELDERS Limited is to sell its automotive interior parts business, Futuris Automotive for $69 million to affiliates of US-based private equity investor Clearlake Capital Group.
The sale will strip away almost the last of Elders' non-agricultural business units to leave the company as a purely rural services business.
The agreement on the Futuris sale is subject to several conditions including Foreign Investment Review Board approval, but the deal is expected to be completed by the end of this month.
Elders managing director, Malcolm Jackman, said the conclusion of the sale process for Melbourne-based Futuris was a great result for Elders Limited, its automotive business, and its employees.
"The sale is a good outcome for Elders in terms of our priority to focus capital on our rural services business," he said.
It would also help debt-heavy Elders further reduce its gearing with the group's net debt likely to be down around $250m.
"This sale will allow us to increase our focus on supporting the day-to-day needs of our rural and regional clients, delivering a high level of service and security across our entire product and service range," he said.
Elders continued to progress plans with its financiers to strengthen its operations and financial position and the sale of Futuris was an important step in this process.
Clearlake Capital, based in Los Angeles, is a leading investment firm focused on private equity and special situation transactions.
The company's portfolio includes the global plumbing and bathroom products business Jacuzzi and a leading US internet-based apparel and clothing accessories retailer, Bluefly.
Founded just seven years ago the parent company has committed about $3 billion to more than 70 investments.
Clearlake boasts long-term strategic partnership with management to transform and grow companies
Elders said it would be keeping the market informed of progress on its Futuris sale and other asset plans, as appropriate.