Trelleborg AB, the Nasdaq Stockholm-listed tyre giant with a market capitalisation of $4.5bn, has finalised his acquisition of CGS Holding, a smaller competitor with strong market positions in agricultural, industrial and specialty tyres and engineered polymer parts, for $1.3bn in cash.
CGS is headquartered in the Czech Republic and generated sales of approximately $672m in 2015 with an operating margin of 16.5%.
Peter Nilsson, President and CEO of Trelleborg, stated: “With this acquisition, Trelleborg will almost double its sales in agricultural tyres, strengthen its leading position in industrial tyres and add new positions in complementary specialty tyres segments.
“CGS’s engineered polymer solutions add new, interesting positions, and strengthen Trelleborg’s existing leading positions in several of the Group’s current business areas.”
CGS Holding incorporates three brands. Mitas accounts for approximately two-thirds of group sales and has strong mid-market specialty tyres brands, particularly agricultural tyres, and will be integrated into the Trelleborg Wheel Systems business unit.
The offering of specialty tyres is complemented by Rubena’s and Savatech’s niche engineered polymer solutions businesses, including seals, sealing profiles, specialty molded products, printing blankets and other engineered fabrics.
During transition, these other operations will be independent from Trelleborg’s existing operations before being gradually integrated into current business areas.
Non-recurring costs of approximately $8.4m, related to the acquisition, will be charged to Q2 2016.
With the purchase, Trelleborg will have sales of $3.6m, with about 23,000 employees in 47 countries.
