Trelleborg to Acquire UK’s Watts Tyre Group
Trelleborg has signed an agreement for the acquisition of the UK’s Watts Tyre Group through its Trelleborg Wheel Systems business area, an action the Swedish company believes will strengthen its industrial tyre segment position through geographic expansion and an increased presence in the aftermarket. Watts has annual sales of approximately £27.4 million and about 230 employees. The purchase consideration amounts to approximately £21 million.
Trelleborg estimates the unit will contribute a total annual positive earnings effect of approximately £4.1 million (with favourable earnings effects from the date of takeover and with fully realised synergies from 2012). The acquisition requires certain conditions to be met and the approval of the appropriate authorities, and is expected to be finalized in the first quarter of 2011, when the operation will be integrated with the Trelleborg Wheel Systems business area. The Watts Tyre Group head office is based in Lydney, Gloucestershire.
“The acquisition is a further step in our strategy to continuously strengthen our positions in selected segments,” says Maurizio Vischi, business area president of Trelleborg Wheel Systems. “The acquisition improves our positions and generates opportunities for future growth. This also creates favourable possibilities for synergies, primarily through increased use of our efficient and modernised plant in Sri Lanka.
“With the acquisition of Watts Tyre Group, we are taking our industrial tyre operation to a new level,” says Vischi. “We will become stronger in the aftermarket and will, for example, have access to an advanced service concept that is marketed under the name Interfit.”
“Watts Tyre Group also adds a geographic presence that strengthens and complements our existing business,” Vischi concludes. “The operation has sales to 60 countries and is a leader in many growth markets. The acquisition creates good conditions for expansion into growth markets in Asia.”