Agricultural and industrial tire and wheel maker Titan International Inc., a publicly traded company since 1993, will become privately owned again soon if a $350 million offer from a private equity firm is approved.
One Equity Partners L.L.C., a private equity affiliate of JPMorgan Chase & Co., made an offer to acquire the Quincy-based company in a cash merger for $18 per share in Titan common stock. The company has about 19.4 million shares outstanding, which would make the deal worth roughly $350 million.
The offer is subject to reaching a definitive agreement with the customary conditions, due diligence, financing and approvals of the One Equity and Titan boards of directors and Titan's stockholders. Titan said it formed a special committee of its board to pursue discussions with One Equity.
Richard M. Cashin Jr., one of Titan's directors, also is the managing partner of One Equity. Maurice Taylor Jr., Titan chairman and CEO, will participate with One Equity, and Titan board members Mitchell I. Quain and Anthony L. Soave may participate, the company said.
Mr. Taylor said his positions with Titan would not change, nor would the everyday management of the company.
The deal is a good one for Titan because a firm with some financial muscle-One Equity manages $5 billion worth of private equity investments and commitments for JPMorgan Chase-would give it the chance to look at some transaction opportunities in the next six to nine months it couldn't finance otherwise, Mr. Taylor said.
Titan still is trying to complete the $100 million purchase of Goodyear's farm tire business in North America. The deadline to close that deal has been extended three times, as talks with the United Steelworkers (USW) local at Goodyear's Freeport, Ill., agricultural tire plant continue.
The company also has formed a partnership with Rodos Giants L.L.C. and has joined the discussions in the efforts to buy Continental Tire North America Inc.'s Bryan, Ohio, off-the-road tire plant.
One Equity's interest in Titan could be short term, but Mr. Taylor said Mr. Cashin, who has been on the board since 1993, has seen the company's accomplishments and has faith in its long-term potential.
Shareholders to reap benefits with buyout
Mr. Taylor said he expects the boards and shareholders to approve the deal. It is a good opportunity for shareholders who bought stock when the price was low and now have a chance to be rewarded for their patience, unlike those who sold short, he said.
Titan's stock closed at $17.26 per share Oct. 12, after a day that saw the price rise nearly $4 and almost 3.3 million shares traded. The price was the highest for Titan since July 1998 and continued a sharp turnaround since early 2003, when shares fell below $1 and the company was threatened with delisting by the New York Stock Exchange. The price hasn't been in single digits since last November.
Mr. Taylor said in January the firm's good financial shape-solid sales, a rising stock price and profitable quarters-made Titan an ideal acquisition target. He also said 2005 could be Titan's last as a public company.
``We've put ourselves in great shape,'' he said. ``And now we have the ability to do some things as a private company with some strong backing.''
Titan has posted $15.4 million in net earnings on sales of $270.8 million through two quarters of 2005. Its third quarter results are due to be reported Oct. 28.