STOCKHOLM—Trelleborg Wheel Systems should experience significant growth in the next year, thanks principally to the addition of tire maker Mitas a.s. and two acquisitions it made last year.
Trelleborg Wheel Systems' parent, Stockholm-headquartered Trelleborg A.B., purchased CGS Holding a.s. and its three businesses—Mitas, Rubena a.s. and Savatech d.o.o.—in a deal that closed May 31, for about $1.25 billion.
Trelleborg actually received approval to close the deal on May 10 from the European Union, the last it needed from regulatory agencies. However, a company official said, the firm held off finalizing the sale in order to complete more buyer-seller aspects of the transaction.
It is the largest acquisition Trelleborg has made since it purchased Polymer Sealing Solutions, which eventually became Trelleborg Sealing Solutions, in 2003, a Trelleborg spokeswoman said.
Headquartered in the Czech Republic, Mitas is a leading global manufacturer of agricultural, industrial and specialty tires. The spokeswoman said it accounts for about two thirds of CGS' sales and has strong mid-market specialty tire brands with a particularly solid position in agricultural tires.
It will become integrated into Trelleborg Wheel Systems, while Rubena and Sava-tech will remain stand-alone operations during a transition period, according to the spokeswoman, and over time they will become part of other Trelleborg businesses.
Mitas' major markets are in Western, Eastern and Central Europe, she said, where it has a production operation that complements Trelleborg's own manufacturing structure, particularly in the Central European markets.
In addition, the spokeswoman said, “we are gaining a new agricultural tire facility in the U.S. that complements our newly opened facility in the country.” That gives Trelleborg the most modern manufacturing operation for ag tires in the largest agricultural market in the world, she added.
Peter Nilsson, president and CEO of Trelleborg, said completing the purchase means Trelleborg Wheel Systems “will almost double its sales in agricultural tires, strengthen its leading position in industrial tires and add new positions in complementary specialty tire segments.”
Mitas also will broaden its geographical reach and add new positions of strength in complementary tire niches, he noted.
Rubena and Savatech develop and manufacture a broad range of engineered polymer products, including seals, sealing profiles, specialty molded goods, offset printing blankets and engineered fabrics.
Nilsson said overall the addition of the CGS group of businesses helps strengthen Trelleborg's existing positions in several of the segments the group serves.
CGS and its subsidiaries operate 13 manufacturing plants, 11 in Central and Eastern Europe, its new plant in the U.S., and another in Mexico. CGS and its operating companies had sales in the $660 million range for the 12-month period ending June 30, 2015.