SRI buying U.K. distributor Micheldever

WINCHESTER, England (Jan. 5, 2017) — Sumitomo Rubber Industries Ltd. (SRI) is acquiring Micheldever Group, a Winchester-based tire distributor, as part of its efforts to strengthen the market position of its Falken tire brand in Europe.

The pending deal, which is subject to European Commission approval, is valued at nearly $270 million. Micheldever Group is a holding company controlling Micheldever Tyre Services Ltd. (MTS), a wholesaler and retailer of tires in the U.K., established in 1972.

MTS sells to 6,000-plus retailers and auto-repair shops in the U.K. from a network of 15 warehouses and also owns and operates about 100 tire retail outlets under the "Protyre" brand.

MTS sells around 6 million tires per year — roughly equal to 20 percent of the U.K. market — and reported sales last year of $400 million, SRI said.

SRI is buying the distributor from Graphite Capital Management L.L.P., which has owned it since 2006.

MTS CEO Duncan Wilkes said the deal "highlights the success that MTS has enjoyed over the last 10 years and the growth the company has experienced under Graphite Capital's ownership.

"SRI is fully committed to the UK market and to supporting our proven approach to growing the business," Mr. Wilkes said. "Today's transaction ensures continuity of both management and of our successful multi-brand, multi-segment strategy."

Falken is one of seven brands Micheldever said it has exclusive rights to throughout the U.K.; the others are Autogrip, General, GT Radial, Kumho, Runway and Toyo. The company also is a major distributor of Bridgestone, Continental, Dunlop, Goodyear, Michelin and Toyo, according to its website.

The acquisition — SRI's second deal in the U.K. in recent weeks — is seen as aligning with SRI's "Vision 2020? long-term strategy developed following the dissolution in 2015 of its global alliance with Goodyear.

SRI struck a deal in late December to acquire the trademark rights to the Dunlop brand in 86 countries where it currently operates as a licensee of Sports Direct International P.L.C.