BRABRAND, Denmark—Kenda Rubber Industrial Co. Ltd. has acquired Starco Europe A/S, a Denmark-based supplier of wheels for applications ranging from wheelbarrows and mowers to large agricultural and industrial machinery.
With 550 employees and sales, in 2016, of $129.4 million, Starco operates factories in the U.K., Croatia, Sri Lanka and China, as well as eight sales and distribution locations across Europe.
Jimmy Yang, vice chairman of Kenda Rubber Industrial Co. Ltd., wrote in an email the Taiwanese company's board had authorized up to $21.2 million for the acquisition.
"Both parties did reach to a satisfactory price to complete the transaction," added Yang, who is also president of Kenda USA
The deal gives Kenda, a Starco supplier since 1982, expertise in applications, polyurethanes and wheel design. The combination with Kenda's tire development capabilities, it said, will give the group a "unique position in the market."
The move is also intended to enhance Kenda's position in Europe, which represents a relatively small share of its overall global sales – posted at about $1.05 billion in 2016.
"We recently launched our Focus on Europe strategy [and] the acquisition of Starco is a natural step to more quickly establish a platform [for] better access to the market in this region," Yang said.
"Kenda has strong market share in [the] USA in trailer, lawn and garden, golf car, utility vehicle tire [marketss] and would like to grow its market share in these areas."
Starco's management team will report to Kenda USA, though the acquired business does not expect organizational changes or redundancies related to the acquisition.
Starco CEO Richard Todd said he sees many opportunities under Kenda, including from an increased global presence, improved distribution and new market insight.
"Kenda gains new opportunities in Europe and Starco in the US. This will allow us to serve customers globally," said Todd, stressing that Starco would continue to operate in its existing markets and retain current suppliers.
"By joining forces, we believe we can achieve global market leadership in various market segments," Yang said. "Today we serve some of the same OEMs, the same type of customers and we believe our service and offering to them will be even better."