Trelleborg Finalizes CGS Holding Acquisition – Industry News

Trelleborg has finalized the acquisition of CGS Holding a.s., a privately-owned company with agricultural, industrial, and specialty tires, as well as engineered polymer solutions. The total cash consideration amounted to approximately SEK 10.9 billion on a cash and debt-free basis. CGS is headquartered in the Czech Republic and generated sales of approximately SEK 5.6 billion in 2015 with an operating margin of 16.5 percent.

“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,” said Peter Nilsson, president and CEO of Trelleborg. 

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.

“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,” said 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, with about 23,000 employees in 47 countries.