HADERA, Israel (Sept. 4, 2002) — A U.S. investors' group, led by industry veteran Harvey Brodsky, has offered to buy a 51-percent share in Israel's Alliance Tire Co. (1992) Ltd. for $50 million.
The investors, operating as Harvey Brodsky Group L.L.C., have studied Alliance off and on for more than 10 years, Mr. Brodsky said, and have negotiated seriously for a stake for the past 18 months.
“We view this as a good business opportunity, a long-term investment,” Mr. Brodsky said. “Alliance has strong R&D and engineering resources, and the plant's assets are valued at more than $100 million.”
Alliance Tire makes passenger, light and medium truck, farm, OTR and industrial tires at its 40-year-old plant in Hadera, but the firm is best known outside of Israel for its farm and OTR tires. Alliance Tire was in the red the past two years, reporting losses of $6.3 million and $19.6 million in 2001 and 2000, respectively, while generating sales of $96 million last year.
Harvey Brodsky Group has five principals, including Mr. Brodksy and Charles Stein, a childhood friend of Brodsky's and the group's accountant. One other investor is European and the other two choose to remain anonymous, Mr. Brodsky said.
The group and Alliance signed a memorandum of understanding Aug. 29. About $10 million of the $50 million purchase price will be injected into the company either as a shareholders' loan or an addition to the firm's equity, Alliance wrote in a memorandum to the Israeli Securities Authority and Tel Aviv Stock Exchange.
Due diligence is expected to last 60-70 days, said Mr. Brodsky, who has been involved in the tire industry for more than 30 years and executive director of the Tire Retread Information Bureau since 1982.
Mr. Brodsky said his group hopes to be able to bring marketing expertise to the table, helping Alliance broaden its international business. The firm markets its passenger and truck tires locally, and focuses its export business on the farm and OTR tires.
Alliance reported about $13.5 million in sales in North America last year, according to Alliance data. The company is represented here by Alliance Tire Co. (USA) Ltd. in Danville, N.J.