Trelleborg, a provider of engineering polymer solutions, has finalised the acquisition of CGS Holding – a privately owned company with positions in agricultural, industrial and specialty tyres as well as engineered polymer solutions.
The total cash consideration amounted to approximately SEK 10.9 billion (approx. £834,000 GBP) on a cash and debt-free basis. CGS is headquartered in the Czech Republic and generated sales of approximately SEK 5.6 billion (approx. £47,000 GBP) in 2015 with an operating margin of 16.5 percent.
“It is highly gratifying to welcome CGS to the Trelleborg Group. The company has long been on our list of interesting acquisitions,” explained Peter Nilsson, President and CEO of Trelleborg.
“The acquisition means that Trelleborg will almost double its sales in agricultural tyres, strengthen its leading position in industrial tyres and add new positions in complementary specialty tyres 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,” he added.
CGS Holding includes the businesses Mitas, Rubena and Savatech. Mitas accounts for approximately two-thirds of group sales and has strong mid-market specialty tyres brands with a particularly strong position within agricultural tyres.
The offering of speciality tyres 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.
“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,” added Nilsson.
Mitas will be integrated into the Trelleborg Wheel Systems business area. During transition, other operations will be independent from Trelleborg’s existing operations before being gradually integrated into current business areas.
Following the acquisition, Trelleborg will have sales of about SEK 30 billion (approx. £2.5 billion GBP), with about 23,000 employees in 47 countries.