MESNAC buys Wyko Tire Technology
Qingdao, China based tyre manufacturing equipment maker MESNAC Co. has taken a 100 per cent equity position in US firm Wyko Tire Technology. In its relatively short history MESNAC has rapidly grown to the number four position in its field and speaking to Tyres & Accessories in China at the end of November, company executives hinted that the next phase of growth would be both outside its native China and would include acquisitions such as the latest Wyko purchase. MESNAC has indicated it will retain the Wyko brand and continue to provide normal service and support to customers, with no disruption in business.
The exact terms of the deal have not officially disclosed, but financial newswires report that Mesnac plans to spend US$6.3 million wholly acquiring Davian Enterprises LLC, which owns advanced technologies to produce drums, and has the intellectual property rights to the tyre technology and products of the Wyko brand. According to the reports, the transaction will be carried out through Fulcrum Tire Technology, a wholly-owned subsidiary of Mesnac.
Tyres & Accessories understands that, through to the end of the third quarter 2011, Davian has total assets of $4.7 million and net asset value of $1.38 million. The company posted revenue of $7.796 million and net profit of $1.12 million during the first three quarters.
‘No job losses’ at UK and US offices
Company owners Ian Smith and David Jones told local newspapers that Wyko’s 60 employees and the company’s manufacturing headquarters in the US and its offices in the UK should not be affected: “There will be no job loss. The new owners are interested in establishing a research and development facility in Tennessee, and within two years look to see an expansion here,” Jones told the Knoxville News Sentinel.
Smith and Jones reported MESNAC approached them at a European trade expo with negotiations have been held for the past six months. Smith explained that the buy is a good fit because MESNAC uses Wyko tools on its machines that are sold to tyre manufacturers, while Jones added: “MESNAC sees Wyko as a bridgehead into Europe and the US. If there is a trend, that is the trend we’re seeing.”
Wyko was recently at the centre of a corporate espionage case last year when two engineers were accused of taking photos of proprietary Goodyear Tire & Rubber Co. equipment and sending the images to a China-based tyre firm. Wyko was reportedly under contract to Haohua South China Guilin Rubber Co. Ltd. to supply a machine used to make huge tyres for heavy equipment. The engineers were convicted in December 2010 and sentenced to four years of probation and 150 hours of community service.
Commenting on this context Smith told local newspapers: “Neither David nor I were involved with the company when that incident occurred. The company was in bad shape when we bought it in December 2009. The company as it stands today is thriving. This is by no means a distress sale. We are securing the future of Wyko with this sale.”