Carlyle Group agrees to pay $1.4 billion for Goodyear's Engineered Products business unit
Goodyear Tire & Rubber Co. has agreed to sell substantially all of its Engineered Products business for $1.475 billion. The buyer is EPD Inc., an entity sponsored by Carlyle Partners IV L.P.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals as well as EPD's completion of a labor agreement with the United Steelworkers of America.
As part of the transaction, Goodyear has agreed to a trademark licensing agreement that allows EPD to use the Goodyear brand and certain other trademarks in connection with the Engineered Products business.
Goodyear expects to record a gain on the sale, the amount of which has not yet been finalized.
"This transaction reinforces our focus on our core consumer and commercial tire businesses and on improving our balance sheet," says Robert Keegan, Goodyear chairman, CEO and president. "We anticipate using the proceeds for purposes including reducing debt, addressing legacy obligations and supporting growth in our tire businesses."
Specific plans regarding debt reduction and investments will be announced at a later date.
Timothy Toppen, president of Goodyear Engineered Products, says the transaction will not interfere with its daily operations or on meeting customer needs.
"The cornerstone of our operating philosophy stays intact -- we want to help our customers grow their businesses for the long-term."
Goodyear Engineered Products operates 32 facilities in 12 countries and has approximately 6,500 associates. It manufactures and markets engineered rubber products for industrial, military, consumer and transportation original equipment end-users.
The product portfolio of the business includes hoses, conveyor belts, power transmission products, rubber track, molded products and air springs. In 2006, Engineered Products had sales of approximately $1.5 billion.
The Carlyle Group is one of the world's largest private equity firms with $54.5 billion under management, investments in more than 185 companies, and 750 employees in 16 countries. In the aggregate, Carlyle portfolio companies have more than $68 billion in revenue and employ more than 200,000 people around the world.