Global private equity firm Kohlberg Kravis Roberts (KKR) has entered into an agreement to acquire a controlling stake in tyre manufacturer Alliance Tire Group (ATG),marking an exit for PE firm Warburg Pincus investment since 2007.
The deal is the largest private equity control transaction in the last seven years in India. Though terms of the transaction were not disclosed,according to sources the deal is worth $485 million for a 75 per cent stake in the company.
KKRs investment in ATG is being made through its investment funds and it has roped in other co-investors especially US-based Crescent Mezzanine,which provides funding to buy out players for leveraged acquisitions. Ivy High Income Fund,an investor in fixed income securities,also participated in the transaction.
Yogesh Mahansaria,founder of ATG,will continue to maintain an ownership stake in the company and partner with KKR to continue to grow the business. KKRs investment will enable us to continue to expand into new markets,make strategic acquisitions,and help scale our global presence, said Mahansaria.
ATGs tyres are manufactured at dedicated facilities in Israel and India,with R&D facilities in Israel,India,the US and South Africa. ATG is a leader in an attractive industry with strong underlying growth drivers, said Sanjay Nayar,member of KKR and head of KKR India.
Credit Suisse served as the financial advisor to ATG and Nine Rivers Capital advised the founders. Barclays Bank and JP Morgan advised KKR.