BOSTON-GPX International Tire Corp. has significantly expanded its operation and manufacturing presence in North America by purchasing Maine Industrial Tires Ltd.
The maker of specialty off-the-road tires for the agricultural, construction, materials handling and transportation industries gains a strong production base in the U.S. and Canada, where it previously had none. The firm added Maine Industrial Tires´ plants in Gorham, Maine; Mississauga, Ontario; and Guelph, Ontario.
The deal, for an undisclosed amount, was expected to be completed March 31.
GPX, formed in 2005 when Galaxy Tire & Wheel Inc. and Dynamic Tire Corp. merged, obtains tires at its wholly owned factory in Ruma, Serbia, and a number of different contract manufacturers in Asia, according to Mike Knorr, GPX vice president of marketing.
The company has a strong presence in Europe and Asia, he said. It also imports tires into North America, where its distribution network supplies more than 1,000 aftermarket dealers and 30 original equipment manufacturers.
Maine Industrial Tires has a big manufacturing and tire engineering base, along with an experienced work force, in North America. The company has operated under the abbreviation MITL since mid-1999 when it acquired Mississauga-based Industrial Tires Ltd. and Kenhar Wheel and Baseband (later renamed Precision Products) in Guelph.
Knorr said MITL ranks second or third in the North American specialty tire market with an estimated 33 percent share. GPX is among the top five in the pneumatic off-the-road tire segment in terms of sales, and expects to be in the top three by year´s end.
"The MITL acquisition makes a lot of sense for both companies as our product lines are largely complementary," said GPX Chairman Robert Sherkin. "MITL is one of the world leaders in solid resilient and press-on tires whereas GPX is a leader in off-the-road pneumatic tires."
Equally important, GPX will use its strong distribution network and global sourcing capabilities to build sales of MITL´s flagship tire lines, Knorr said.
The acquired business will continue to be based in Gorham with Ken Hebert, the current chief financial officer of MITL, taking over as president of the firm. He replaces Terry Lindberg, who is retiring.
With the purchase, Boston-headquartered GPX will have a work force of more than 1,000. No layoffs are planned at any of the company´s factories, Knorr said. MITL brand names and products will continue to be maintained and marketed separately from GPX
In addition to tires, MITL also makes urethane spinners, sprockets for track vehicles, snowplow blades and an assortment of other products.
The transaction is the first made by GPX since Sterling Investment Partners purchased a $41 million equity interest in the company in January. That deal gave the company some financial clout in the marketplace. Since then, GPX has been looking for prospective acquisitions, especially in the U.S. and China.
GPX has considered buying an interest in some plants it contracts with in China. Co-CEO Bryan Ganz said earlier this year the firm wants to implement a production model where 30 to 50 percent of its capacity comes from wholly owned facilities.
GPX, with sales in the $300 million range, also is doubling the size of its plant in Serbia to give it the capability of making a full line of European industrial, multipurpose traction, flotation and radial agriculture tires. The expansion should be complete in 2007.