QUINCY, Ill. (July 25, 2013) — Titan International Inc.'s pending purchase of Russia's Voltyre-Prom farm tire plant could be just the first of additional investments in the region, according to Titan Chairman and CEO Maurice Taylor.
"This acquisition (of Ekaterinburg, Russia-based Voltyre-Prom) will increase our international footprint and be Titan's base for other acquisitions in the CIS region," Mr. Taylor said during the release of Titan's second quarter financial results.
He did not identify any other potential investments but told financial analysts in a conference call July 25 that other acquisitions in the CIS region would be undertaken under the auspices of the partnership Titan formed with Russian Direct Investment Fund (RDIF) and One Equity Partners (OEP) to acquire a "controlling" stake in Voltyre-Prom.
Titan hopes to close on the Voltyre-Prom acquisition by Sept. 1.
Titan has not disclosed terms of the pending deal, but Mr. Taylor said Russian media have reported the deal is valued at roughly $100 million and that Voltyre-Prom's annual sales are in the $200 million range.
Mr. Taylor also said Titan has the option to buy out RDIF and OEP within three years of the deal's closing. He said on its own Titan wouldn't have bid for more than 20-percent control, but together the investing consortium will control 100 percent.
Additionally, Titan is looking to establish wheel-manufacturing in South American to complement the firm's growing tire business there. Titan bought Goodyear's agricultural tire business in South America — including a plant in Sao Paulo, Brazil, in early 2011 — and the business there is getting stronger, Mr. Taylor said.
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