QUINCY, Ill.—Tire and wheel maker Titan International Inc. could be a private company by as soon as the end of February.
Maurice Taylor Jr., the company´s chairman and CEO, said the sale of Titan to One Equity Partners L.L.C.—a private equity affiliate of JPMorgan Chase & Co.—could be completed by the end of February if final negotiations between a special board of directors committee and One Equity progress as expected. Due diligence has been completed, and after an agreement is reached, Titan´s full board and then the shareholders will have to approve the deal, Taylor said.
In October, the Quincy-based company announced it had received a cash merger offer from One Equity for $18 per share in Titan common stock. Titan has about 19.5 million shares outstanding, making the transaction worth roughly $350 million.
Jana Partners L.L.C., a hedge fund and Titan´s largest shareholder with about 14.8 percent of the common stock, last month expressed doubts via a letter to the Titan board that the $18 per share price was the highest the company could attain in a sale. But Taylor said no one else came through with a better deal, and the offer on the table is a "good deal for everyone."
The price of Titan shares, which have been traded on the New York Stock Exchange since March 1994, closed at $17.52 on Jan. 18. The price hit $18 on two non-consecutive days last October, but the last time it reached $18 prior to then was June 1998.
In early 2003, Titan´s share price fell below $1 and the company was threatened with delisting by the NYSE. The price hasn´t been in single digits since November 2004.
After the sale is completed, little will change day-to-day at Titan´s tire and wheel operations, Taylor said, and he will remain the company´s top executive. Richard M. Cashin Jr., a company director since 1993, also is the managing partner of One Equity.
Taylor said at the time of the offer that the deal is a good one for his company because One Equity has some financial muscle—it manages $5 billion worth of private equity investments for JPMorgan Chase—and that would allow Titan to examine some new transaction opportunities within the next year that it couldn´t finance otherwise.
Titan, which does the bulk of its business within the agricultural and construction markets, completed its $100 million purchase of Goodyear´s farm tire business in late December. The firm also has entered into partnership with Rodos Giants L.L.C. in an effort to buy Continental Tire North America Inc.´s off-the-road tire plant in Bryan, Ohio.
The Goodyear acquisition—which includes a tire plant in Freeport, Ill.—is expected to increase Titan´s 2006 sales by about $250 million. The company posted sales of $373.6 million and net earnings of $16.6 million through nine months of 2005. In 2004, Titan reported net income of $11.1 million on sales of $510.6 million.
Taylor said about a year ago that the firm´s good financial outlook made Titan an ideal acquisition target and that 2005 could be its last as a public company.