Carlisle Merges Tire & Wheel, Power Transmission Belt Businesses
On January 20 Carlisle Companies Incorporated announced it has combined its tyre and wheel business with its power transmission belt business. Explaining the decision, company chairman, president and CEO David A. Roberts commented: “We announced plans to sell our power transmission belt business in April 2008. We were close to selling the business to a strategic buyer late last year when our transaction was derailed by the financial crises. During our extended sales process, we also considered retaining the belt business, which has remained profitable, and combining it with one of our other businesses. Though we recently received an offer near book value, the decision was made to retain and combine the belt business with our tyre and wheel business.
“These two businesses have similar manufacturing processes and share common customers,” Roberts continued. “We intend to use the Carlisle Operating System to fully integrate the belt business so that it becomes a product line of our tyre and wheel business. The synergies we expect to achieve from this integration will allow us to continue to move toward achieving our long-term goals, including operating margin improvement.”
Carlisle Power Transmission manufactures belts and accessories for industrial power transmission applications and has annual sales of approximately US$115 million. The division had been moved to discontinued operations in the second quarter of 2008. Carlisle reports that the company is presently evaluating the financial statement impact and estimates pre-tax charges of $6.7 million related to fixed-asset charges and plant restructuring costs in the fourth quarter of 2009.