QUINCY, Ill. (July 26, 2012)—OTR and farm tire and wheel maker Titan International Inc. has offered to acquire majority control of Titan Europe P.L.C., a minority-owned affiliate and producer of wheels, undercarriage components and assemblies for tracked and wheeled off-road vehicles.
Titan International is proposing to take over Titan Europe via a one-for-11 ordinary share swap, subject to certain conditions. Titan valued the deal at roughly $178 million, based on Titan Europe's prevailing share price. The offer is considered a premium of 10 to 12 percent over Titan Europe's share price during the past two weeks.
Titan International, through its Titan Luxembourg S.a.r.l. subsidiary, owns a 21.7-percent share in Titan Europe, according to Titan Europe documents.
Titan International said it believes there is “compelling logic” in the acquisition of Titan Europe as it would establish a global wheel, tire and track industrial group servicing customers in the agricultural, construction, earthmoving and mining industries.
In particular, Titan said the proposed acquisition presents opportunities for its tire business in South America and Europe and will cement the existing cooperation between Titan International Mining Services — established in 2011 to offer complete tire, wheel and track services near large mines worldwide—and Titan Europe's own Mining Service Centres expertise.
Titan Europe generated $679 million in sales in fiscal 2011, split 37/63 between wheels and undercarriages. The business is largely OE-oriented with customers in the agricultural, construction, industrial and mining industries.
Sales in North America amounted to nearly $82 million.
This deal is in addition Titan International's pending agreement to buy majority control of Planet Corp. group of companies, a Perth, Australia-based sales and service company specializing in OTR tires and wheels that potentially could give Titan access to tire manufacturing capacity in China.
Planet Corp. comprises National Tyres, Acme Wheel & Rim Co., Resource Tyre Co. and Choice Tyres Wholesalers.
Titan said it is acquiring Planet Corp. in line with its initiative to grow its OTR tire and wheel business globally. Planet Corp. will be a subsidiary of Titan Mining Services, which the Quincy-based company formed recently to build its mining business around the globe.