STONERIDGE INC 8-K

What Happened
Stoneridge, Inc. (SRI) announced it completed the sale of its Control Devices business on January 30, 2026 to Control Devices Acquisition, LLC, an affiliate of Center Rock Capital Partners, for $59.0 million (subject to customary post‑closing adjustments). The sale was effected via transfer of the Company’s interests in Stoneridge Control Devices, Inc. and related entities following a pre‑closing reorganization of assets and liabilities. The Purchase Agreement includes customary reps, warranties and covenants, a five‑year non‑competition obligation for Stoneridge in the defined Restricted Territory, and non‑solicitation/non‑disparagement provisions. Simultaneously, the parties executed manufacturing agreements to continue production continuity in Mexico and China. Stoneridge issued a press release and scheduled a management webcast on February 2, 2026 to discuss the transaction and provided a presentation containing preliminary non‑GAAP measures.

Key Details

• Purchase price: $59.0 million, subject to customary post‑closing adjustments; closing date January 30, 2026.
• Buyer: Control Devices Acquisition, LLC (affiliate of Center Rock Capital Partners, L.P.).
• Non‑compete: 5‑year non‑competition obligation for Stoneridge and affiliates in the Restricted Territory.
• Manufacturing continuity:
  • Mexico Manufacturing Agreement: initial 3‑year term, auto‑renewing annually, product pricing fixed for 3 years; thereafter CPI‑based adjustments shared equally. Control Devices pays material costs and certain out‑of‑scope costs.
  • China Manufacturing Agreement: initial 12‑month term with possible 6‑month extension; costs based on actual Suzhou facility costs; fixed USD/RMB rate for first 6 months, then quarterly adjustments.
• Officer change: Rajaey Kased, President of Control Devices, resigned as a Stoneridge officer effective Jan 30, 2026 and will continue providing similar services to Control Devices post‑closing; resignation was not due to any disagreement.
• Disclosure: Feb 2, 2026 press release and webcast; presentation includes preliminary 2025 adjusted EBITDA estimates and an implied adjusted‑EBITDA multiple (company says reconciliation to GAAP net income is not practicable at this time).

Why It Matters
This is a material divestiture that removes the Control Devices segment from Stoneridge’s business and provides immediate cash consideration of $59.0M (subject to adjustments). Investors should expect the Company’s future revenue, margins and reported results to reflect the absence of Control Devices and to consider any pro‑forma impacts when comparing prior periods. The manufacturing agreements and the buyer’s retention of the business’s president aim to preserve operational continuity for customers and supply chains. The five‑year non‑compete limits Stoneridge’s ability to compete with the sold business in specified markets, which may influence the Company’s product and market strategy going forward. Management’s disclosed non‑GAAP metrics are preliminary and not yet reconciled to GAAP.