Swedish company acquires Mitas parent
Swedish company acquires Mitas parent
CC plant manager see no immediate impact on CC operations
A Swedish polymer solutions company has signed an agreement to acquire Mitas North America’s parent company, ČGS Holding.
It will be several months before the Charles City operation — the Czech Republic-based company’s only production location in the U.S. — learn of any production changes, Plant President Pavel Charvat said Monday. Between 150 to 200 employees work in the Charles City plant at a given time, manufacturing products for known North American businesses such as John Deere and New Holland.
“For the time being, there will be no impact on the Charles City operations,” Charvat said.
“It is my feeling that we have achieved (at the Charles City plant) an important role in the future … but those are my personal feelings.”
“We are a big piece of the puzzle,” Charvat added.
Closing of the transaction is subject to approvals from relevant authorities, and Trelleborg expects it to be completed in the first half of 2016.
The Mitas plant has been in a tax rebate partnership with the city of Charles City and the Charles City Area Development Corporation since 2011, City Administrator Steve Diers said.
The city allows a 90 percent rebate of Mitas’ incremental property tax, not to exceed $2.7 million, in exchange for Mitas meeting employment and minimum wage requirements in the community. The rebates have averaged about $160,000 a year for the past two fiscal years, Diers said.
The partnership allows Mitas to supplement new job training and capital investment, said CCADC executive director Tim Fox.
“This is a competitive plant,” Fox said. “We’re very proud of the relationships we have developed with Mitas, and we’re very proud of the plant’s performance. We anticipate a similar positive relationship with Trelleborg.”
According to a news release from Trelleborg, the total cash consideration amounts to approximately $125 billion on a cash and debt-free basis. ČGS is headquartered in the Czech Republic and generated sales of approximately $6.4 billion with an EBIT-margin of 16 percent in the rolling 12-months period ended June 30.
ČGS is a supplier of specialty tires and engineered polymer solutions and is headquartered in the Czech Republic. It employs approximately 6,300 people at its 13 production sites.
Mitas accounts for approximately two-thirds of ČGS sales and has strong mid-market specialty tires brands with a particularly strong position in agricultural tires, the news release said. Other subsidiaries develop and manufacture a broad range of engineered polymer products, including seals, sealing profiles, specialty conveyor belts, printing blankets and other engineered fabrics.
“ČGS, with its strong and favorably performing operations in agricultural and industrial tires as well as engineered polymer solutions, will strengthen and complement Trelleborg’s already leading positions in a number of existing areas,” Peter Nilsson, President and CEO of Trelleborg, said in a news release. With the acquisition of ČGS and its subsidiary Mitas, Trelleborg is establishing itself as a global leader in agricultural tires and reinforces its leading position in industrial tires. As a result of the acquisition, Trelleborg Wheel Systems will almost double its revenues, broaden its geographical reach and add new positions in complementary tire niches. Mitas is performing strongly despite the current downturn in the agricultural market, the news release said. Moreover, the acquisition of ČGS’s other industrial polymer businesses will enhance Trelleborg’s leading positions in several of the Group’s existing business areas.
“ČGS highly complements our manufacturing footprint with well-invested and competitive production facilities in Central and Eastern Europe, the U.S. and Mexico. The transaction adds to our capabilities, represents a strong strategic fit and is expected to generate significant synergies and cross-selling opportunities,” Nilsson said. “The plan is to gradually integrate the acquired entities into Trelleborg’s existing business areas. We regard the purchase price as attractive given the synergy potential and expected recovery for the agricultural market.”
The Trelleborg Group has annual sales in over 40 countries.
The Group comprises five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing Solutions and Trelleborg Wheel Systems. In addition, Trelleborg owns 50 percent of TrelleborgVibracoustic, a global leader within antivibration solutions for light and heavy vehicles. The Trelleborg share has been listed on the Stock Exchange since 1964 and is listed on Nasdaq Stockholm, Large Cap.
By Kate Hayden and Chris Baldus [email protected]