KKR closes in on Alliance Tire buyout - report
KKR is said to be in the final stages of acquiring an 80% stake in Indian tire maker Alliance Tire Group. The deal values the company at $600 million and it will see KKR buy Warburg Pincus' entire interest in the company as well as shares from other minority stockholders.
An exclusivity agreement was signed by both KKR and Warburg Pincus on Monday, according to Live Mint.
Advent International, The Blackstone Group and Temasek Holdings were reportedly among those eyeing the asset when a potential deal was announced in January. Bain Capital and The Carlyle Group were said to have expressed interest but dropped out at an earlier stage.
Alliance was founded in Israel in 1950, filed for bankruptcy protection in the late 1980s and was acquired by a consortium including Bear Stearns in 1992, and went public in Tel Aviv the following year. Warburg Pincus and Yogesh Mahansaria, former CEO of India's Balkrishna Tyres, bought the company for $150 million in 2007. Warburg Pincus took a 70% stake with the Mahansaria family holding the remainder.
Alliance specializes in producing agricultural and off-road tires; a market is estimated to be worth $12 billion per year, compared to $150 billion for the car tire market. Alliance acquired global rights to the Galaxy and Primex brands from GPX International in 2009 after the US business filed for bankruptcy.
The company had sales of more than $500 million in 2012, up from $125 million six years ago.
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