PORTLAND, Ore.—Forklift parts maker Cascade Corp. is buying Industrial Tires Ltd. for an undisclosed amount in a deal expected to close in January. Portland-based Cascade said the acquisition of ITL, which primarily produces solid industrial tires for the forklift original equipment and replacement markets, will further the company's efforts to provide ``one-stop shopping.''
The deal also gives Mississauga, Ontario-based ITL the financial resources and global presence needed to grow its business, said Thomas P. Buckley, ITL founder, chairman and CEO.
The tire maker employs about 200 and recorded revenue of about $33 million in fiscal 1996, ended Oct. 31. The company derives about 20 percent of its sales making non-pneumatic tires for baggage carts, aerial platform lifts, skid steers and mining equipment and has the capacity to produce 450,000 units annually at its 100,000-sq.-ft. Mississauga factory. The 39-year-old firm also has production off-take agreements with industrial tire makers in Mexico, Sri Lanka and China totaling about 200,000 units for 1997, Mr. Buckley said.
Cascade employs 1,100 and produces lift truck attachments, masts and accessories. Cascade posted profits of about $10 million with sales of $234 million in its latest fiscal year, ended Jan. 31, 1996. The ITL purchase expands Cascade's offerings and marks the company's entry into the solid tire business.
``This is a key step in our move toward providing one-stop shopping for our customers,'' said Robert C. Warren Jr., Cascade CEO and president. ``Our goal is to be customer intimate and to be able to handle a wide range of our customers' requirements with top-quality, top-value products.''
ITL's current management team will remain in place. Any changes being considered at ITL will be announced at or before the January closing date, Mr. Buckley said.
``The transaction accommodates the (ITL) management group's desire to remain active in maintaining the company's momentum and directing its future growth in harmony with Cascade's well-estab-lished global presence and growth strategies,'' he said.
First-generation family-owned ITL has been looking for a partner for 11/2 years, Mr. Buckley said.
``Four tire makers were interested in us,'' said Mr. Buckley, declining to disclose the companies' names. ITL and Cascade officials met early on in the search. ``They were our player of choice,'' Mr. Buckley said.
``Cascade has an extremely aggressive go-forward plan and so does ITL,'' Mr. Buckley said. ``It didn't take very long for us to find one another. It's a marvelous fit.''
With manufacturing operations in the U.S., Canada, Europe, South Africa, Japan, Korea and mainland China, Cascade's global ties open the door for ITL to hike its sales in Asia Pacific and Europe, Mr. Buckley said.
Cascade's strong global position in the forklift industry will help ITL boost its exports outside of North America to about 40 percent of its business, from about 5 percent, by the year 2000. Exports outside of North America accounted for about $1.5 million of ITL's sales in fiscal 1996. By 2000, the exports will account for about 40 percent of the solid tire maker's projected $60 million in revenue, or $24 million—16 times the firm's current export sales, Mr. Buckley said.
Cascade officials recently decided to take an aggressive ``systems supplier'' approach to bolster stock prices and enhance Cascade's attractiveness and position in the forklift industry.
Founded in 1943, Cascade has avoided acquisitions for 20 years. But this month the company announced two—ITL and Hyco Cascade Pty. Ltd., a Brisbane, Australia-based distributor of forklift parts with $14.5 million in sales last year.
``Cascade indeed is on the hunt,'' Mr. Buckley said. ``We've been encouraged by Cascade to look at acquisitions. Before, it would have been very difficult for us to meet the capital investment needed to double our sales let alone consider acquisitions. We're very excited.''