Yokohama Rubber Company has decided to buy Alliance Tire Group, a Netherlands-based company led by Indian entrepreneur Yogesh Mahansaria, for $1.2 billion from private equity firm KKR. The Japanese firm will purchase all shares from KKR and other parties and expects to complete the acquisition by July 1, according to a statement released on Friday.
The deal is valued at about 2.2 times of Alliance Tire’s annual sales and more than 12 times its operating profit for 2015 fiscal.
Founded in 2006 by tyre industry veteran Ashok Mahansaria and his son Yogesh Mahansaria, Alliance Tire is the world’s fifth largest, off-highway tyre maker and is engaged in making them for the agriculture, forestry and construction segments and has two plants in India, one each in Tirunelveli (Tamil Nadu) and Dahej (Gujarat). Yokohama Rubber does not currently manufacture or sell tyres for agricultural or forestry machinery. The acquisition of Alliance will strengthen Yokohama Rubber’s product line-up in commercial tyres, according to the statement.
In 2013, KKR acquired a controlling stake in Alliance Tire Group from Warburg Pincus Llc for an undisclosed sum.
The company is headed by chairman Ashok Mahansaria and his son Yogesh is group chief executive.