LEAVITTSBURG, Ohio-Pensler Capital Corp., which earlier this year bought Canada's United Tire & Rubber Co., is acquiring Denman Tire Corp. from Eagle Industries Inc. for an undisclosed amount.
In a deal that was expected to close Sept. 27, Pensler Capital, a private investment company based in New York, will acquire all operations of the Leavittsburg-based manufacturer of radial and bias tires for light truck, industrial, construction and other off-road applications.
The change in ownership won't affect the daily operations or management structure at Denman, said Charles Wright, Denman's president and CEO. Mr. Wright will retain those posts, while Sanford Pensler, president of Pensler Capital, will become chairman of the firm.
Denman's sole production facility in Leavittsburg employs 400, and the deal won't change the plant's roster, Mr. Wright said. The firm also operates a warehouse in Austintown, Ohio.
``To our employees, this is a transparent transaction; to our customers, too,'' Mr. Wright said.
In April, Pensler Capital acquired a controlling interest in United Tire & Rubber Co. Ltd. of Toronto for about $12 million, Pensler Capital said. United Tire produces primarily off-the-road tires for large mining, industrial and construction equipment.
Combined annual sales of Denman and United Tire will be about $100 million, the firms said-with Denman accounting for the larger share, according to Mr. Wright.
The acquisition of Denman fits into Pensler Capital's plan to break into the rubber and plastics industries, according to Mr. Pensler.
``We are committed to expanding, and look forward to continuing to build our presence in this industry to over $200 million by the end of 1997 through internal growth and additional acquisitions,'' he said.
Pensler Capital plans to keep Denman and United Tire as separate entities but will explore synergies between the firms in technology and distribution, Mr. Pensler said.
Denman's new owner will be a benefit to the tire maker, Mr. Wright said. ``We're joining a company that's in the tire business,'' he said. ``I think there's a lot of opportunity.''
Although Eagle Industries was a ``great'' parent firm, Mr. Wright said, Denman was its only holding in the tire industry.
``It's not like Eagle wanted to get rid of Denman,'' Mr. Wright said. ``It was: `Let's find a better place for Denman.'''
Eagle Industries, which is owned by Great American Management Co., is the kind of firm that buys and sells companies, Mr. Wright explained. ``They're always looking to increase shareholder value.''
Denman's new parent has earmarked some capital for improvements to the facility, according to Mr. Pensler. Denman officials are compiling a list of needed improvements, most of which will be in the areas of capacity enhancement and new equipment, he said.
Opened in 1919, the Leavittsburg plant still is in good condition, Mr. Pensler said. ``It hasn't been a neglected plant.''
As recently as three months before the buyout, Denman had been in preliminary merger talks with Fidelity Tire Manufacturing Co. Fidelity produces radial and bias passenger, light truck, truck/bus and agricultural tires at its plant in Natchez, Tenn.
The two firms had been in merger discussions on and off for more than a year, but that possibility is virtually out of the question now, Mr. Wright said. ``We would not rule anything out, but with (Fidel-ity's) performance, it doesn't look good,'' he said.
Leo Bradley, president of the union local that staffs the Fidelity plant, has said the company lost $800,000 in 1995 on sales of about $97 million.
Dennis Terwilliger, president and CEO of Fidelity parent Condere Corp., couldn't be reached for comment.
Mr. Pensler said Denman's new parent doesn't plan to continue the merger talks.
Although Denman experienced some lean years in terms of sales and layoffs at the start of the decade, the firm has since turned around under new management. Combined with United Tire, Denman gives Pensler Capital a platform to expand in the rubber industry, Mr. Pensler said.
If you can bring both capital and management to companies, there are opportunities in the rubber industry, he said.
`We are committed to expanding, and look forward to continuing to build our presence in this industry to over $200 million by the end of 1997 through internal growth and...acquisitions.'