Trelleborg, through its Trelleborg Wheel Systems business area, has signed an agreement for the acquisition of the UK’s Watts Tyre Group, which has annual sales of approximately SEK 300 M and about 230 employees.
Watts Tyre Group is currently a major player in global terms for industrial tires. This acquisition strengthens Trelleborg’s world-leading position in industrial tires, through geographic expansion and an increased presence in the aftermarket.
“The acquisition is a further step in our strategy to continuously strengthen our positions in selected segments,” says Maurizio Vischi, business area president of Trelleborg Wheel Systems. “The acquisition improves our positions and generates opportunities for future growth. This also creates favorable possibilities for synergies, primarily through increased use of our efficient and modernized plant in Sri Lanka.”
“With the acquisition of Watts Tyre Group, we are taking our industrial tire operation to a new level,” says Maurizio Vischi. “We will become stronger in the aftermarket and will, for example, have access to an advanced service concept that is marketed under the name Interfit.”
“Watts Tyre Group also adds a geographic presence that strengthens and complements our existing business,” Maurizio Vischi continues. “The operation has sales to 60 countries and is a leader in many growth markets. The acquisition creates good conditions for expansion into growth markets in Asia.”
The purchase consideration amounts to approximately SEK 230 M. The unit will contribute with favorable earnings effects from the date of takeover and with fully realized synergies from 2012, is estimated to generate a total annual positive earnings effect of approximately SEK 45 M. The acquisition requires certain conditions to be met and the approval of the appropriate authorities, and is expected to be finalized in the first quarter of 2011. The operation will be integrated with the Trelleborg Wheel Systems business area. The Watts Tyre Group head office is based in Lydney, in the UK.