FINDLAY, Ohio (Sept. 17. 2004) — Cooper Tire & Rubber Co. has found a buyer, or rather two, for its Cooper-Standard Automotive business.
Cooper plans to sell the unit, which generated $1.66 billion in sales and $96 million in operating profits last year, for about $1.17 billion to an entity formed by two U.S. capital investment firms. The sale price is slightly below that forecasted by investment analysts recently.
The transaction, expected to close in the fourth quarter, is subject to the purchasers' receipt of financing from committed sources and other customary conditions, including regulatory approvals, Findlay-based Cooper said.
The buyers are Cypress Group, a New York-based private equity group that manages two private equity funds with more than $3.5 billion in commitments, and Goldman Sachs Capital Partners, a specialist in corporate equity and mezzanine investing with more than $5.25 billion in capital.
Thomas A. Dattilo, Cooper's chairman, president, and CEO, said the company believes Cooper-Standard under the new ownership “will be well-positioned for continued strong growth….”
Cooper-Standard's half-year 2004 results showed 70.4- and 20.1-percent improvements in operating earnings and sales, respectively. The earnings improvement boosted the unit's profit/sales ratio 2 ½ points to 8.5 percent.
Cooper Tire will use the proceeds from the sale for debt reduction, investment in its tire operations, repurchasing shares or a combination thereof, Mr. Dattilo said.
Cooper decided to sell the business earlier this year to focus on its higher-potential replacement tire business. “We look forward to pursuing growth opportunities in our tire business,” Mr. Datillo said.