Titan International has entered into a definitive agreement for the sale of its Australian wheel business, to OTR Tyres, a local leading national tire, wheel and service provider. The closing date is expected to be Thursday, March 31, 2022.
The sale includes gross proceeds and cash to be repatriated of approximately A$23 million ($17.3 million USD), and the assumption of all liabilities, including employee and lease obligations. The purchase price is subject to customary post-closing review and potential adjustments related to target working capital, along with the release of certain restricted cash related to lease guarantees. The proceeds related to the transaction are expected to be primarily utilized to pay down debt and pay advisory fees.
Paul Reitz, president and chief executive officer, commented, "In recent years, we took a number of steps to turn around the financial performance in this business, including exiting from the tire servicing business and less profitable products. Our Australian management team has consistently made decisions to put the business on a good path. In concert with our Board of Directors, we believe the business will be best suited in the hands of a local market leader, which can continue to develop and grow the business going forward. We will continue to operate our undercarriage business in Australia, and the sale of this business will have minimal impact on sales of tires manufactured by Titan. We thank all of our dedicated employees in this business for their contributions to Titan's success and we wish them the very best in their future with OTR Tyres."