Michelin to acquire Camso for $1.45 bln
Michelin entered into an agreement to acquire a Canadian OTR major Camos for $1.45 billion.
Both companies will combine their OTR businesses and form a new division, which will be managed from Quebec.
Through studies and discussions with Camso, Michelin has identified significant opportunities to increase sales and reduce costs, thereby unlocking up to US$55 million in synergies by 2021. After obtaining the customary approvals, Michelin will acquire Camso for US$1.45 billion, corresponding to an enterprise value of US$1.7 billion, i.e., a multiple of 8.3 times EBITDA after synergies. The transaction will not impact the Group’s robust financial position, said Michelin.
Camso has been in designing, manufacturing and marketing OTR mobility solutions since 1982, with net sales of $1billion. It produces rubber tracks for farm equipment and snowmobiles, and in solid and bias tyres for material handling equipment. Camso also ranks among the top three players in the construction market, in track and tyres solutions for small heavy equipment. Leveraging its technological leadership in tracks and related systems, its competitive manufacturing footprint, particularly in Sri Lanka, and strong customer awareness of its CAMSO and SOLIDEAL brands, Camso has demonstrated its ability to grow rapidly, expanding at an average pace of 7% per year since 2012.
By acquiring Casmso, Michelin is expected to be the leader in the OTR segment.As world leader, the new entity will represent more than double the net sales of Camso, supported by 26 plants and approximately 12,000 employees and will benefit from sustainably dynamic markets.
The acquisition will, in the agricultural market, offers a comprehensive range of premium radial tyres and tracks. In the construction market, Camso will reinforce Michelin’s offering with its bias tyres and tracks offers. While in the material handling equipment market, Michelin will leverage Camso’s renowned SOLIDEAL and CAMSO brands to become the market leader in solid tyres.
The deployment of the new entity’s offer will be accelerated by the complementarity of both Michelin and Camso’s distribution networks.
Cooperation between Camso and Michelin researchers will bolster the Group’s innovation capacity in tracks and airless tires. Cross-fertilization of R&D expertise will enable the teams to consolidate the group’s position as a global technological leader in support of sustainable mobility, as Michelin’s headway in terms of long-lasting performance of tyres is a differentiating factor and a key strength for reducing its environmental footprint. In addition, Michelin’s technological breakthroughs in reducing soil compaction while maintaining superior traction, for example, will contribute to the products that Camso develops.
Jean-Dominique Senard, Chief Executive Officer of the Michelin group, said: “Michelin and Camso have many values in common. This acquisition is a wonderful mutual opportunity. Michelin will benefit from all of Camso’s skills in the off-the-road mobility markets and Camso from the full range of Michelin’s expertise in the specialty markets.”
“Joining up with Michelin’s off-the-road teams is a fantastic opportunity for Camso because of the similarity of our cultures as well as our growth potential,” said Pierre Marcouiller, Executive Chairman of Camso. “Camso will achieve its ambition to become the global off-the-road market leader and will contribute its dynamic teams, its technical and manufacturing assets and its customer-focused mindset. The transaction has received the backing of all Camso’s shareholders.”