GPX International Tire Corp. has acquired solid industrial tire and wheel maker Maine Industrial Tires Ltd. (MITL), giving the company its first North American production base and expanding its product portfolio.
GPX Chairman Robert Sherkin said in a press release the deal was ``largely complementary,'' calling MITL ``one of the world leaders in solid resilient and press-on tires.'' GPX's expertise is in pneumatic off-the-road tires for the agricultural, construction, materials-handling and transportation industries. The deal, for an undisclosed amount, was completed March 31. It will add an estimated $70 million in annual sales to GPX's sales of $300 million.
GPX-formed in 2005 when Galaxy Tire & Wheel Inc. and Dynamic Tire Corp. merged-makes tires at a plant in Ruma, Serbia, and contracts their manufacture with a number of tire producers in Asia, according to Mike Knorr, GPX vice president of marketing.
Mr. Sherkin said GPX will review ``all elements of (MITL's) production and sales cycles'' to increase MITL's competitive stature.
MITL makes solid industrial tires at plants in Gorham, Maine, and Mississauga, Ontario, and wheels and base bands at Guelph, Ontario. It also makes some pneumatic industrials at Gorham.
Equally important, GPX will use its strong distribution network and global sourcing capabilities to build sales of MITL's flagship tire lines, Mr. Sherkin said.
The acquired business will continue to be based in Gorham with Ken Hebert, the current chief financial officer of MITL, taking over as president of the firm. He replaces Terry Lindberg, who is retiring.
With the purchase, Boston-based GPX will have a work force of more than 1,000. No layoffs are planned at any of the company's factories, Mr. Knorr said. MITL brand names and products-primarily the MaineTire and ITL tire brands-will continue to be maintained and marketed separately from GPX's brands, such as the Primex industrial line.
GPX is evaluating its own plants to accommodate the growing demand for tires such as MITL's Brawler line of solid industrials, Mr. Knorr said.
The purchase is the first made by GPX since Sterling Investment Partners bought a $41 million equity interest in the company in January. That deal gave the company some financial clout in the marketplace. Since then, GPX has been looking for prospective acquisitions, especially in the U.S. and China.
MITL has used that moniker since mid-1999 when it acquired Mississauga-based Industrial Tires Ltd. and Kenhar Wheel and Baseband (later renamed Precision Products) in Guelph. Maine Tire has existed in Gorham since 1949.
Mr. Knorr said MITL ranks second or third in the North American specialty tire market with an estimated 33-percent share. GPX is among the top five in the pneumatic off-the-road tire segment in terms of sales and expects to be in the top three by year-end.
The company has a strong presence in Europe and Asia, he said. It also imports tires into North America, where its distribution network supplies more than 1,000 aftermarket dealers and 30 original equipment manufacturers.
In addition to tires, MITL also makes urethane spinners, sprockets for track vehicles, snowplow blades and an assortment of other products.
GPX has considered buying an interest in some plants it contracts with in China. Co-CEO Bryan Ganz said earlier this year the firm wants to implement a production model where 30 to 50 percent of its capacity comes from wholly owned facilities.
GPX, with sales in the $300 million range, also is doubling the size of its plant in Serbia to give it the capability of making a full line of European industrial, multipurpose traction, flotation and radial agriculture tires. The expansion should be complete in 2007.