QUINCY, Ill. — Titan International Inc. has bought out fully one of the two partners it had in its JSC Voltyre Prom joint tire production venture in Russia, paying nearly $47 million in two transactions to affiliates of One Equity Partners to settle OEP's "put option" from January 2019.
The deal, which closed July 31, raises Titan's ownership stake in Volgograd, Russia-based Voltyre Prom to 64.3% from 43%. Russian Direct Investment Fund (RDIF) — which set up the Voltyre-Prom venture in 2013 as co-owned joint venture involving Titan, OEP and RDIF — continues to hold a 35.7% minority stake in Voltyre Prom, although it has agreed to sell that share to Titan for roughly $50 million in cash and shares of Titan common stock.
The Russian tire maker — previously part of the JSC Cordiant group — operates a 2 million-sq.-ft.-plus factory in Volgograd that produces agricultural and industrial tires. Capacity there is rated at 2 million tires per year, according to information released in 2013.
The plant started producing Goodyear-brand farm tires in 2018 for select distributors throughout Europe, Titan said in its 2018 annual report. This supply is being expanded this year as production continues to ramp up.
The put option in January by One Equity affiliate OEP 11 Cooperatief U.A. obligated Titan to buy OEP's share in either cash or Titan common stock, in amounts set by the shareholders' agreement. One Equity Partners is a New York-based middle market private equity firm that focuses on the industrial, health care and technology sectors in North America and Europe.
To settle OEP's put option, Titan's Titan Luxembourg S.à r.l. paid OEP $16 million during the second quarter and then $30.7 million in a second payment on July 31, Titan said in its second quarter financial filings.
Europe, including Russia, accounted for 6% of Titan's sales worldwide last year, or roughly $96 million