LAS VEGAS—Pensler Capital Corp. wants to expand its manufacturing operation and is considering several alternatives for the distribution arm of off-the-road tire maker United Tire & Rubber Co. Ltd. in Canada, including the possibility of selling it. Pensler, which owns Denman Tire Corp. in the U.S. and holds a majority stake in United Tire, is conducting a strategic review to determine whether to retain and expand the Canadian distribution unit, or sell it.
"We're either going to expand the business and bring in a variety of brands or exit the business," said Sandy Pensler, Pensler president, in an interview during the recent International Tire Expo in Las Vegas.
The distribution unit, which does about $15 million (U.S.) in sales annually, is a "difficult fit" strategically for the company, he said, adding "the return on capital is not as good on the distribution end."
The thrust for Pensler is to expand its manufacturing base, both internally and through acquisition.
"We're anxious to get something through acquisition and use our management talent to grow," Mr. Pensler said.
That growth could come in a variety of forms, such as acquiring a specialty tire company or a rubber manufacturing business. "We also might look at larger things," he said.
While Denman and United Tire remain separate, all Denman tires made by United are built to Denman specifications through the oversight of Denman personnel.
Today, Denman Tire is United Tire's largest customer, Mr. Pensler said, and United is using the Denman name in Canada on tires, in addition to its own name.