MUSCATINE, Iowa (Nov. 5, 2004) — Bandag Inc. has agreed to sell its South African business to local management for about $3.5 million, effective Dec. 1.
The name of the new company will be Bandag Southern Africa (Pty) Ltd., and a long-term licensing agreement should become effective Dec. 2, assuming completion of the transaction the day before.
Muscatine-based Bandag said the South African operations account for less than 2 percent of net sales and total assets of the overall company and contributed about $600,000 to pre-tax income in 2003 and $500,000 to pre-tax income for the first nine months of 2004.
The $3.5 million purchase price includes a cash payment of about $2 million, with the remainder to be paid in equal installments over five years. The actual payment will vary based on currency levels, Bandag said.