(Editor's Note: This story is part of our #TireBiz30 in which we feature one archived story every day of September to celebrate Tire Business' 30th anniversary. Each story represents one of the most relevant news story published in our pages for that year.)
BUFFALO. N.Y.— BTR P.L.C., which finalized its $109 million acquisition of Dunlop Holdings P.L.C. March 27, will sell Dunlop Tire Corp. to U.S. investors — including Dunlop U.S. management — for $118 million and the repayment of $60 million in loans.
BTR accepted a package nearly identical to that offered by investors to Dunlop Holdings previous to the BTR buy-out.
According to Dunlop Tire Corp., the deal was recommended to BTR by Dunlop Chairman Sir Michael Edwardes shortly after BTR's purchase of Dunlop.
The U.S. investors are led by First Boston Inc., an investment banking firm, and include 17 members of Dunlop Tire's senior management team, Dunlop said at a news conference May 15.
According to a Wall Street Journal report, the $60 million in loans includes $10 million to $15 million in loans to BTR.
The remainder of Dunlop North America Inc. — including Dunlop Sports Corp., Dunlop Aviation and Dunlop Industrial Inc. will continue to operate as subsidiaries of BTR.
Some managerial responsibility for the sporting goods operations will continue to be handled from the Buffalo headquarters until BTR can make adequate management arrangements, Dunlop Tire Corp. management said.
The transaction is subject to the formal approval of Dunlop Holdings stockholders, but BTR, which holds the majority of Dunlop's shares, already has committed its vote to the deal's approval. The sale, scheduled for completion July 2, would make Dunlop privately held.
BTR Chairman Sir Owen Green said the transaction would reduce the firm's borrowing and increase funds for expansions.
At Dunlop North America headquarters in Buffalo, Dunlop Tire President and CEO Randall L. Clark called the deal the "most exciting development in our history."
Clark said the transaction provides for a continuity of the company's management, removes the company from the financial difficulty that had surrounded Dunlop Holdings prior to the buy-out, and places it solidly on the foundation of its record-setting growth over the past five years.
Though Dunlop Holdings is out of the picture, Dunlop Tire still will be a member of the worldwide Dunlop group of tire companies, benefiting from reciprocal contract agreements with other Dunlop units concerning technological and manufacturing advancements, Clark said.
Clark said such an arrangement gives each company more management freedom and should have a positive effect on the group. Dunlop's world tire group includes members in the U.S., Australia, South Africa, Japan (Sumitomo Rubber Industries Ltd., which also owns Dunlop's European tire operations), Malaysia, India, and Trinidad.
According to BTR, Dunlop Tire's assets as of Dec. 31, 1984, totaled $84 million and earnings for the year ended on that date were $17.5 million. Dunlop Tire sales in North America in 1983 were $425 million.
What issue concerns you most heading into 2019?
|The threat of more tariffs.||
27% (27 votes)
|The new Congress in Washington.||
35% (35 votes)
|Price fluctuations for the products we sell.||
10% (10 votes)
|More disruptions across the industry.||
29% (29 votes)
|Total votes: 101|