Trelleborg acquires the UK’s Watts Tyre Group

In a press release Thursday, Trelleborg, through its Trelleborg Wheel Systems business unit, reported it had signed an agreement for the acquisition of the UK’s Watts Tyre Group, which has annual sales of approximately SEK 300 M and about 230 employees.

Watts Tyre Group is currently a major player in global terms for industrial tires. This acquisition strengthens Trelleborg’s world-leading position in industrial tires, through geographic expansion and an increased presence in the aftermarket.

Trelleborg Wheel Systems business unit president Maurizio Vischi said the acquisition is a further step in the firm’s strategy to continuously strengthen its positions in selected segments. He further added that the acquisition improves Trelleborg’s positions and generates opportunities for future growth. This also creates favorable possibilities for synergies, primarily through increased use of the firm’s efficient and modernized plant in Sri Lanka, said Vischi.

Commenting further on the investment, Vischi reiterated that with the acquisition of Watts Tyre Group, Trelleborg is taking its industrial tire operation to a new level. Trelleborg will become stronger in the aftermarket and will, for example, have access to an advanced service concept that is marketed under the name Interfit, he added.

Other than that, Watts Tyre Group also adds a geographic presence that strengthens and complements Trelleborg’s existing business, Vischi said. 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, he said.

The purchase consideration amounts to approximately SEK 230 million. The unit will contribute with favorable earnings effects from the date of takeover and with fully realized synergies from 2012, is estimated to generate a total annual positive earnings effect of approximately SEK 45 million.

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. The operation will be integrated with the Trelleborg Wheel Systems business area. The Watts Tyre Group head office is based in Lydney, in the UK.

Trelleborg is a global industrial group whose leading positions are based on advanced polymer technology and in-depth applications know-how. Trelleborg develops high-performance solutions that seal, damp and protect in demanding industrial environments.

The Trelleborg Group had annual sales during 2009 of approximately SEK 27 billion, with about 20,000 employees in 40 countries. The Group comprises four business areas: Trelleborg Engineered Systems, Trelleborg Automotive, Trelleborg Sealing Solutions and Trelleborg Wheel Systems.

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