Bridgestone sold its tire plant and distributor in the Russian Federation to the S8 Capital group
[ad_1]
Bridgestone sold its tire plant and distributor in the Russian Federation to the S8 Capital group. Previously, the company acquired the assets of two other market players – Continental and the Russian Cordiant. Due to the new deal, the company is ahead of Nizhnekamskshina in terms of capacity and becomes the second player in the tire market in terms of capacity after Tatneft with the Ikon Tires plant. The transaction amount, according to analysts, could be comparable to Continental – 7-10 billion rubles.
S8 Capital has closed a deal to purchase Bridgestone’s assets in the Russian Federation – the company received a plant and a tire distributor on the local market, the Russian diversified holding reported.
The Bridgestone plant in Ulyanovsk with a capacity of 2.4 million tires per year was launched in 2016, investments in production amounted to about 12.5 billion rubles. In addition to the plant, the company has an office in Moscow. At the same time, at the end of 2021, Bridgestone in the Russian Federation announced plans to further expand production, mentioning that “new equipment has already been delivered.”
Kommersant’s interlocutors called the asset promising due to its modernity, and analysts pointed to the wide range of products in different segments that the plant produced.
Bridgestone suspended production and import into the Russian Federation since March 2022, and also froze investments. Russia accounted for less than 2% of Bridgestone’s global turnover. About the intention to sell the Russian business became known more than a year ago – in October 2022. As reported in Bridgestone’s report for the third quarter, assets in the Russian Federation were impaired by ¥13.4 billion (about 8 billion rubles) to “recoverable amount.” The latter was estimated based on a discount rate for future cash flows of 15% or more.
The purchase of Bridgestone assets in the Russian Federation is the third acquisition of the tire division of S8 Capital. In May the company closed a deal to acquire the Russian business of Continental, including the plant in Kaluga (4 million tires per year with prospects for expansion to 16 million units). As part of this deal, S8 retained the Gislaved brand. In the same month the company announced on the acquisition of the Russian manufacturer Cordiant with three enterprises in Omsk and Yaroslavl. The capacity of Cordiant plants is 9.7 million tires (passenger cars, light trucks, trucks).
Under the terms of the deal with Bridgestone, the Bridgestone trademarks and brand will not be transferred to the new owner, the statement said.
“We see significant synergy between tire assets, including in relation to R&D, and we plan to develop production, scientific and technological cooperation between the holding’s industrial sites,” said Thorsten Schubert, managing director of the diversified holding S8 Capital.
As a result, together with the ex-plant, Bridgestone S8 consolidated the capacity of almost 16 million units per year. Tatneft, which bought the Nokian plant – now Ikon Tires, has a capacity of 17.5 million tires per year, and the former Tatneft asset Nizhnekamskshina has a capacity of 15 million tires (passenger cars, light trucks, trucks).
Bridgestone, like most factories, supplied tires for both primary (to the conveyors of car factories) and secondary equipment for cars, but the basis of its activity was the secondary market. In recent years, that amounted to about 30–40 million units per year.
The transaction amount is not disclosed, but the assets of Continental, as Kommersant wrote, cost S8 7–10 billion rubles. Advance Capital research analyst Pavel Terentyev estimates the Bridgestone deal at RUB 7.5–9.8 billion. He explains that the Japanese Bridgestone is represented in Russia by Bridgestone CIS LLC, whose revenue in 2021 amounted to 23.8 billion rubles. with EBITDA of 2.3–2.6 billion rubles. (by proxy in the form of profit from sales): “Taking into account the average multipliers for transactions related to the departure of foreigners (including tire manufacturers), we can assume that the value of the Russian business of the Japanese company can be estimated at 3.25x–3.75x EV /EBITDA 2021.”
[ad_2]
Source link
