Bridgestone Americas is to buy Bandag for $50.75 per share in cash, valuing the company at about $US1.05 bn.
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The transaction is expected to close late in the first quarter or early in the second quarter of 2007, subject to the usual approvals.
Bandag is a leading manufacturer of tyre retreading materials and equipment. Based in Muscatine, Iowa, it has a global network of more than 900 franchised dealers that produce and market retread tyres and provide tyre management services.
Bandag also owns and operates Tyre Distribution Systems, a commercial retail operation that sells and services new and retread tyres, and it holds an 87.5% interest in Speedco, a provider of on-highway truck lubrication and routine tyre services to commercial truck owner-operators and fleets.
In 2005 Bandag had worldwide sales of US$921m. Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of Bridgestone Americas.
“Bandag is a leader in the retreading business, with a strong global reputation for quality, service and technology, as well as an extensive worldwide dealer network,” said Bridgestone Americas chairman and CEO Mark Emkes. “The joining of Bridgestone Americas and Bandag will allow the two companies to better service their customers by offering a comprehensive tyre maintenance solution, backed by a complete line of new and retread truck tyre offerings.”
Bandag and Bridgestone Americas have a decades-long business relationship. TDS stores have been authorized dealers of Bridgestone Americas’ tyres, and many GCR Tyre Centres, units of Bridgestone Americas’ subsidiary, BFS Retail & Commercial Operations, which service the commercial and off-the-road trucking industry, are Bandag dealers.
According to Emkes, the combination of the two companies makes good business and economic sense. “Bandag’s history of success in the retread market and the similarities in the companies’ business models, distribution networks, customer base and respect for employees make this a perfect fit.”
