WESTPORT, Conn. (Nov. 22, 2005) — Private equity firm Sterling Investment Partners has purchased a $41 million equity interest in GPX International Tire Corp (GPX), the company formed by the recent merger of Dynamic Tire Corp. and Galaxy Tire & Wheel Inc.
The deal closed Nov. 18, according to Douglas Newhouse, a Sterling managing partner. “The merger of Galaxy and Dynamic combines Galaxy's leading position with OEMs, skills in engineering and design and quality brand reputation with Dynamic's strength in global, efficient sourcing based on strong relationships with many leading Chinese tire manufacturers,” Mr. Douglas said in a statement.
“A key reason GPX has sought a private equity partner is its desire to be a leading player in the developing consolidation of the specialty tire market,” said M. William Macy, another Sterling managing partner. “Management has identified significant, near-term acquisition opportunities. We look forward to working in partnership with management to continue to grow the business.”
With Sterling's minority ownership in the tire company, the GPX management team will continue to own approximately 50 percent of the company, according to GPX CEO Bryan Ganz.
Sterling invests in a variety of industries, including professional and business services, manufacturing, transportation and logistics, and technology-related companies. The firm has completed investments, strategic or add-on acquisitions and liquidity events with an aggregate transaction value of approximately $4 billion, representing more than 45 companies.
Prior to the Sept. 30 close of the Dynamic-Galaxy merger, the combined company had initiated a search for a financial partner, both to fund an ambitious capital expenditure program and to take advantage of acquisition opportunities. GPX currently has a number of production investment initatives in China where it has longstanding relationships.
At the same time, the company is doubling the size of its Ruma, Serbia, plant and expanding the range of products manufactured there to include a full line of European industrial tires, MPT tires, flotation tires and radial agricultural tires. Mr. Ganz told Tire Business the Serbia plant expansion should be completed by 2007.
GPX also is exploring acquisition opportunities as it looks to increase its product range and presence in Europe, Latin America and the Pacific Rim. Mr. Ganz said the company is negotiating with Chinese manufacturers, but declined to comment further.
GPX expects to post approximately $315 in sales for 2005, Mr. Ganz said.