KKR to buy 90 % in Mumbai-based Alliance Tire for Rs3,568 crore: report
08 Apr 2013
US private equity firm Kohlberg Kravis Roberts & Co (KKR) will buy 90 per cent in Alliance Tire Group (ATG) from rival Warburg Pincus and owner Yogesh Kumar Mahansaria, valuing the Mumbai-based tyre maker at about $650 million (Rs3,568 crore), including debt of $125 million (Rs686 crore), the Economic Times today reported, citing two people familiar with the transaction.
"The deal is likely to be announced this week as all the three sides have agreed on the financial terms and have more or less completed the legal formalities," one of the sources told the paper.
New York-based Warburg Pincus, which had acquired a 80-per cent stake in ATG in 2007 for approximately $150 million, will exit the company by selling its entire holdings, while Mahansaria will sell-10 per cent stake to KKR and retain 10 per cent.
ATG develops and manufactures a wide range of off-highway tyres, primarily for the agricultural, construction and earth-moving sector.
It is a leading global off-highway tyre manufacturer supplying over 1,000 different types of tyres to a customer base spread across 90 countries.
Warburg Pincus partnered with Mahansaria, former CEO of Balkrishna Tyres, to fund the initial acquisition of Hadera, Israel-based Alliance Tire Company and the subsequent development of a greenfield, low-cost manufacturing facility in Gujarat.
ATG has two manufacturing plants, one in Tirunelveli in southern India and another in Hadera in Israel, and also produces tyres in China and Taiwan through contract manufacturers.
It has a turnover of more than $500 million and a presence in over 120 countries, according to its website.
