An American investors' group has withdrawn its $50 million offer for 51 percent of the stock of Israeli tire maker Alliance Tire Co. (1992) Ltd.
The unstable Middle East situation, coupled with Alliance's inability to restructure its loans outstanding to its major lenders, led to the collapse of the deal Feb. 3, according to Harvey Brodsky, head of the Pacific Grove-based Harvey Brodsky Group L.L.C.
``We were very disappointed over this,'' said Mr. Brodsky, who is best known in the U.S. as managing director of the Tire Retread Information Bureau. ``We had discussed some very serious, positive plans with the executives of Alliance-some very upbeat marketing ideas.'' If Alliance's lenders changed their minds and met the Brodsky Group's terms for loan restructuring, ``we'd be back (in negotiations) in a heartbeat,'' he said.
As reported previously, the Brodsky Group had studied Alliance on and off for more than 10 years and began serious negotiations for a stake in the company in early 2001. The group offered Alliance $50 million cash for $40 million in equity and $10 million in owners' loans convertible to equity.
Alliance also is disappointed in the collapse of the deal with Mr. Brodsky and his partners, ``who represent a great deal of tire industry knowledge and marketing savvy,'' said Simon Soesan, vice president of marketing and sales for the Hadera, Israel-based tire maker.
``But they are always welcome at our table,'' Mr. Soesan said in a Feb. 4 e-mail message. ``In the meantime, we are confident that the next time we meet, Alliance will be an even larger, stronger worldwide marketer.''
Alliance-which makes all types of tires but concentrates on farm and off-the-road tires for its export business-continues to make strides in developing radial and flotation tires, according to Mr. Soesan.
``Our sales in Europe make us a market leader, where challenging soils and tough winter conditions show off the strengths of our agricultural and forestry tires,'' he said. ``And our sales team in North America-augmented by a newly hired representative in Canada-is helping Alliance establish a bigger presence here.''
Regarding the volatile situation in the Middle East, Mr. Soesan said: ``During the Gulf War in 1991, even as Tel Aviv was bombed by Iraqi Scud missiles, Alliance did not miss a single shipment.'' The company ``has continued to supply its customers with top-quality tires,'' despite war and terrorism, he added.
Mr. Soesan pointed to several promising new company products in the farm and OTR sector, including:
* The A-390 OTR radial flotation tire, size 66/50R22.5, which replaces dual tires on grain carts and commodity trailers. Rated for a 75-mph road speed with a load of more than 14,000 lbs., the A-390 can be driven into fields to obtain loads of crops from harvesters, then travel over the road to deliver the crops to market, he said.
* The I-221 flotation tire, size 450/55-17. New this spring, he said, it is two inches wider and five inches larger in diameter than the largest previously available I-221, and can carry 4,500 lbs. at a speed of 30 mph.
* The A-380 flotation radial. Introduced at the SIMA Show in Paris in 2001, the A-380 has proved successful in the heavy, wet soils of Europe and now is available in North America, Mr. Soesan said. The A-380 offers outstanding performance, reduced soil compaction and a 40-mph top road speed, he added.
* A prototype forestry tire that has tested well during winter use in Scandinavia, and should be released commercially within the next year.
Alliance had North American sales of about $13.5 million in 2001. Results for fiscal year 2002 will be issued toward the end of March, Mr. Soesan said.
Alliance Tire USA, the Danville, N.J.-based subsidiary, recently expanded its U.S. distribution network, signing Ag Equipment Specialties (AES) of Mercersburg, Pa., to distribute the Alliance line to dealers throughout the U.S. Midwest, Northeast and Middle Atlantic states.
Ag Equipment Specialties is a distributor of farm equipment and components, and also retrofits equipment with accessories to customers' orders. It services dealers in states east of the Mississippi River as far south as Tennessee/North Carolina from its facility in Mercersburg near the Pennsylvania Turnpike and Interstates 68 and 81.
Other Alliance distributors in the U.S. include Kansasland/Nebraskaland Tire, Dunlap & Kyle Inc./Hesselbein Tire, Del-Nat Tire Corp. and Les Schwab Tire Centers Inc.