European equity group buys Kwik-Fit chain
LONDON-CVC Capital Partners has agreed to sell Kwik-Fit Group Ltd., the 1,685-outlet automotive and tire service chain, to Speedy 1 Ltd., a new entity backed by the private equity group PAI Partners.
The deal is valued at $1.44 billion, or more than twice what CVC paid Ford Motor Co. in 2002 for a 70-percent stake in Kwik-Fit, which is considered the European leader in ``fast-fit'' automotive services with annual sales of about $1.4 billion.
Hamish Mackenzie, a partner at PAI, said Kwik-Fit has ``exceptional brand recognition in its key markets'' and benefits from significant growth prospects as a market leader.
Founded in 1971 in Edinburgh, Scotland, by Tom Farmer, Kwik-Fit has steadily grown through acquisitions and new stores to its current size of 1,685 centers and 215 mobile units in the United Kingdom, Netherlands, France (trading as Speedy) and Germany (trading as Pit-Stop).
PAI reportedly outbid U.S. buyout giant Kohlberg Kravis Roberts & Co. and Japanese tire maker Bridgestone Corp. for Kwik-Fit, according to several European news reports.
Sumitomo plans to build car tire factory in Thailand
BANGKOK-Sumitomo Rubber Industries Ltd. will build a passenger tire plant in Thailand's Rayong Province that eventually will become the company's largest plant, with production at 7 million units a year.
Groundbreaking for the new factory in Rayong's Amata City Industrial Estate will take place in August, Sumitomo said, with production start-up scheduled for January 2007. Sumitomo did not disclose the size of the investment.
Daily capacity will start at about 12,000 units and ramp up to 22,000 by 2010, Sumitomo said.
The plant will use automated production systems that require fewer workers and less space for equipment, according to Sumitomo Rubber (Thailand) Ltd. Ryochi Sawada. It will be Sumitomo's eighth plant, joining four others in Japan, two in Indonesia and one in China.
Michelin acquires land to allow China plant expansion
SHENYANG, China-Group Michelin has bought nearly 39 acres of land adjacent to its Shenyang tire plant to allow for future growth.
The company, however, denied published reports in China that it already has committed $170 million to expand truck tire capacity at the plant, which operates as Michelin Shen Yang Tire Co. Set up by Michelin in 2001 as a joint venture with Shanghai Tyre & Rubber Co., it has listed annual capacity of 1 million car, light truck and medium truck tires.
Nokian's Russian plant begins production
VSEVOLOZHSK, Russia-Nokian Tyres P.L.C.'s new plant in Vsevolozhsk has started production only 10 months after ground was broken on the factory.
Nokian is targeting production at the plant this year of up to 500,000 tires, with first stage annual capacity of 1.5 million units. Nokian already is working on the second phase of the $180 million project, which will boost capacity to 4 million units a year by 2008. Capacity will be expanded gradually, reaching 8 million units by 2016, Nokian said, adding that the first tires produced were Nokian Hakkapeliitta 4 winter tires.
Pirelli to sell its energy, telecom cables business
MILAN, Italy-Pirelli & C. S.p.A. has agreed to sell its Energy & Telecom Cables & Systems business to Goldman Sachs Capital Partners for nearly $1.6 billion and will invest the proceeds in ``strategic activities,'' including its tires, telecommunications and real estate.
The business being sold generated pre-tax earnings of $136.6 million on sales of $3.99 billion in 2004 with 12,000 employees and 52 plants globally.
Upon completion of the transaction, Pirelli's net financial position will be improved by about $1.5 billion, including nearly $600 million more equity value and about $840 million in reduced debt.
Pirelli, RoadOne closer to joint venture in China
MILAN, Italy-Pirelli S.p.A. and RoadOne Tyre Co. Ltd. of Jinan, China, are creating a joint venture aimed at making all-steel radial truck tires at RoadOne's factory in Shandong Province.
The transaction, which is expected to be completed within the year, is subject to the approval of the relevant authorities.
RoadOne was established about two years ago by Chinese conveyor belt maker Yinhe Group. RoadOne's plant has a capacity of 3 million units a year. Earlier Pirelli had discussed a venture with Aeolus Tyre, but those talks later hit an impasse.