QUINCY, Ill.Titan International Inc.'s pending purchase of the Voltyre-Prom farm tire plant in Ekaterinburg, Russia, could be just the first of additional investments in the region, according to Titan Chairman and CEO Maurice Taylor Jr.
This acquisition will increase our international footprint and be Titan's base for other acquisitions in the CIS region, Mr. Taylor told financial analysts in a conference call.
He did not identify any other potential investments but said 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 said it hoped 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 that 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 America to complement the firm's growing tire business there. Titan bought Goodyear's agricultural tire business in South Americaincluding a plant in Sao Paulo, Brazil, in early 2011and the business there is getting stronger, Mr. Taylor said.