Titan Realigns Plans as Bryan Deal Details Emerge
(Akron/Tire Review) Even as Titan International adjusted its sales and earnings targets, more details emerged from its purchase of Continental Tire North America’s OTR tyre plant in Bryan, Ohio. Titan bought the Bryan tyre plant for $41.4 million in property, plant and equipment, and paid another $11.5 million for existing inventory. In additional, the deal gives Titan a license to sell OTR tyres under the General brand.
Titan said it “currently has excess capacity” but “has the possibility to increase the output volume of OTR tyres by a minimum of 30 per cent over the next 12 months.” The Quincy, Illinois-based company said it will be ordering some $8 million in new manufacturing equipment next year, and “anticipates moving a large portion ($10 to $12 million) of its idled assets to its tyre factories.”
Titan’s acquisition of the Bryan plant and previous purchase of Goodyear’s agricultural tyre business and Freeport, Illinois, farm tyre plant added an estimated $340 million to its sales, Titan said.
“For 2006, I have set management objectives for my staff at $720-$735 million in sales and an EBITDA (earnings before interest, taxes, depreciation and amortization) range of $75-80 million,” said Titan Chairman and CEO Morry Taylor. “Looking ahead to 2007, I have increased management objectives to $800-$825 million and an EBITDA range of $105-$115 million.”
Over the next 18 months, Taylor said, Titan will reorganize the Freeport and Bryan facilities to “obtain maximum synergies.” Titan’s plants in Des Moines, Iowa, and Freeport will “gain added sales volume through the addition of the Bryan facility in order to expand Titan’s new OTR mining business.”
“Though we’ve seen a dip in the ag market, I think large farm tractor demand will start to pick up in 2007, once everyone sees that corn harvest will not keep up with the demand of new ethanol factories,” said Taylor.