BOSTON (Dec. 9, 2009)—The U.S. Bankruptcy Court for the District of Massachusetts has approved the sale of GPX International Tire Corp.'s Canadian distribution business and industrial/OTR tire manufacturing assets, clearing the way for GPX to wrap up business before year-end.
The buyers are two groups of investors led by existing GPX executives, one led by GPX/Dynamic Tire Corp. executives Robert Sherkin and Peter Koszo, for the Canadian assets, and one led by GPX “insiders” Bryan, Neil and David Ganz for the manufacturing assets.
The deals are in addition to the $54.2 million sale of GPX's distribution businesses outside of Canada, the Galaxy and Primex brand names, and associated assets in the U.S. and South Africa to Alliance Tire Group.
The Canadian buyout team bid $23.9 million for GPX's Canadian subsidiary, Dynamic Tire Corp., and all related assets.
Under the terms of the transaction, Brampton, Ontario-based Dynamic Tire will become a separate entity engaged in the sale and distribution in Canada of Galaxy- and Primex-brand OTR tires, the sale and distribution of medium radial truck and passenger car tires, and private label sourcing, GPX said.
Dynamic operates six sales/distribution offices in Canada, three in Ontario and one each in Alberta, New Brunswick and Quebec, according to the firm's Web site.
The solid tire business buyers, known collectively as MITL Acquisition Co., bid $11.3 million for the business, which includes tire plants in Gorham, Maine, and Hebei, China, and a wheel plant in Red Lion, Pa., and rights to the MaineTire, MITL, ITL and Brawler brand names.
The solid tire business generated North American sales of $66 million in 2007 and 2008 and is projected to produce $45 million this year, according to court filings. The business has 110 employees in the U.S., 20 in Canada and 1,282 in China
“The court's approval of these transactions is an excellent outcome for the company and its customers, vendors and employees,” said GPX CEO Craig Steinke. “We are excited to work with the three acquirers to close the transactions prior to the end of the year. In doing so, we will enable the continuation of quality and innovation inherent in GPX's brands while providing employment for over 95 percent of GPX's work force.”
GPX filed for Chapter 11 bankruptcy protection Oct. 26 after suffering losses in fiscal 2007 and 2008 and seeing a considerable portion of its business disappear after the U.S. imposed double-digit duties on OTR tires GPX was sourcing from China.