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October 03, 2017 02:00 AM

Kenda acquires Danish wheel maker Starco

Patrick Raleigh, European Rubber Journal
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    REYNOLDSBURG, Ohio — Taiwan's Kenda Rubber Industrial Co. Ltd. has acquired Starco Europe A/S, a Brabrand, Denmark-based supplier of wheels for applications ranging from wheelbarrows and mowers to large agricultural and industrial machinery.

    With 550 employees and sales of $130 million in 2016, Starco operates factories in the United Kingdom, Croatia, Sri Lanka and China, as well as eight sales and distribution locations across Europe.

    In a written reply to European Rubber Journal's enquiry about terms of the deal, Kenda Vice Chairman Jimmy Yang said the Taiwanese company's board had authorized up to $21 million for the acquisition.

    "Both parties did reach to a satisfactory price to complete the transaction," Mr. Yang added.

    The deal gives Kenda — a Starco supplier since 1982 — expertise in applications, polyurethanes and wheel design. The combination with Kenda's tire development capabilities, it said, will give the group a "unique position in the market."

    The move also is intended to enhance Kenda's position in Europe, which represents a relatively small share of its overall global sales — posted at around $1.04 billion in 2016.

    "We recently launched our Focus on Europe strategy [and] the acquisition of Starco is a natural step to more quickly establish a platform [for] better access to the market in this region," Mr. Yang said.

    "Kenda has strong market share in [the] USA in trailer, lawn and garden, golf car, utility vehicle tire [marketss] and would like to grow its market share in these areas," Mr. Yang added.

    Starco's management team will report to Kenda USA, though the acquired business does not expect organizational changes or redundancies related to the acquisition.

    Starco CEO Richard Todd sees many opportunities under Kenda, including from an increased global presence, improved distribution and new market insight.

    "Kenda gains new opportunities in Europe and Starco in the U.S. This will allow us to serve customers globally," Mr. Todd said, stressing that Starco would continue to operate in its existing markets and retain current suppliers.

    For Kenda, Mr. Yang concluded: "By joining forces, we believe we can achieve global market leadership in various market segments — today we serve some of the same OEMs, the same type of customers and we believe our service and offering to them will be even better."

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