US-based Titan International, manufacturer of off-highway wheels, tyres, assemblies, and undercarriage products, has announced the acquisition of Carlstar Group for approximately US$296 million in a transaction consisting of cash and stock, which closed recently, subject to completion of the wire transfers under the purchase agreement and the issuance of the stock consideration.
The transaction price represents a multiple of approximately 4x Carlstar’s FY 2023 adjusted EBITDA of US$73 million and is expected to be immediately accretive to earnings per share and operating margins in 2024.
Carlstar is a global manufacturer and distributor of specialty tyres and wheels for a variety of end-market verticals including outdoor power equipment, power sports, trailers, and small to midsize agricultural and construction equipment. Carlstar operates three manufacturing facilities in the US and one in China.
Carlstar also internally manages 12 distribution facilities around the world. Carlstar’s global 2023 revenues were approximately US$615 million.
Carlstar is majority owned by investment funds affiliated with American Industrial Partners Capital Fund V, one representative from AIP CF V will join Titan’s Board of Directors, the firm added.
Paul Reitz, President/CEO, of Titan stated, “This is a transformative deal for Titan as it expands our manufacturing and distribution footprint while also further diversifying our product portfolio and key customer relationships, making Titan a “one-stop shop” within the specialty wheel and tyre space.”
He added that Carlstar’s catalogue of products are utilised primarily by consumers, which is a much different market than Ag. “In outdoor power equipment and power sports, Carlstar wheels and tyres can be found on products such as ATV/UTVs, lawn mowers and golf carts. Their tyres can also be found on high-speed trailers where performance is a key differentiator. In the Ag market, Carlstar products are typically found on equipment such as backhoes and small skid-steer units, giving Titan a best in class offering,” he offered further.