Trelleborg Finalizes Acquisition of CGS Holding
Trelleborg AB has finalized the acquisition of CGS Holding a.s.
The deal is worth approximately SEK 10.9 billion ($1.3 billion based on the exchange rate on June 1, 2016). CGS is headquartered in the Czech Republic and generated sales of approximately SEK 5.6 billion ($674 million billion based on the exchange rate on June 1, 2016) in 2015 with an operating margin of 16.5%.
“It is highly gratifying to welcome CGS to the Trelleborg Group,” says Peter Nilsson, President and CEO of Trelleborg.
“The company has long been on our list of interesting acquisitions. The acquisition means that Trelleborg will almost double its sales in agricultural tires, strengthen its leading position in industrial tires and add new positions in complementary specialty tires segments.
“CGS’s engineered polymer solutions add new interesting positions as well as strengthen Trelleborg’s existing leading positions in several of the Group’s current business areas.”
CGS Holding includes the businesses Mitas, Rubena and Savatech. Mitas accounts for approximately two-thirds of group sales and has strong mid-market specialty tires brands with a particularly strong position within agricultural tires.
The offering of specialty tires is complemented by Rubena’s and Savatech’s niche engineered polymer solutions businesses, including seals, sealing profiles, specialty molded products, printing blankets and other engineered fabrics, according to Trelleborg.
“We are convinced the agricultural market will recover, enabling us to benefit from an attractive footprint when it does. Accordingly, we consider the purchase consideration to be attractive considering the expected synergies and the future recovery of the agricultural market,” says Nilsson.
The Trelleborg Group has annual sales of about SEK 30 billion in over 40 countries. The Group comprises five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing Solutions and Trelleborg Wheel Systems, and the operations of Rubena and Savatech. In addition, the Trelleborg Group owns 50 percent of Vibracoustic, a provider of antivibration solutions for light and heavy vehicles.
Trelleborg opened its first North American factory to produce agriculture tires in January 2016.