Michelin & Cie. (ML), Europe’s largest tiremaker, plans to buy Brazilian digital truck-fleet management and freight security company Sascar for 1.35 billion reais ($600 million) to speed up overseas expansion.
Sascar’s enterprise value of 1.6 billion reais includes the purchase price plus 247 million reais in debt, Clermont-Ferrand, France-based Michelin said in a statement today. The acquisition is subject to the approval of Brazilian authorities, it said, without providing a timeframe.
“Michelin will benefit from the client base and human, technical and marketing skills built up by Sascar in the rapidly expanding telematics market for professional truck fleets,” Chief Executive Officer Jean-Dominique Senard said in the statement. “This will help us strengthen an important area of growth for the group.”
The tiremaker is adding factories in emerging markets such as Brazil, China and India, as well as in the U.S., where demand for cars is forecast to rise. Sascar, which employs 870 people, generated 280 million reais in revenue in 2013 with earnings before interest, taxes, depreciation and amortization representing 37 percent of that amount, Michelin said.
Michelin shares fell 0.9 percent to 91.63 euros at 11:28 a.m. in Paris, paring the advance to 19 percent this year.
To contact the reporter on this story: Mathieu Rosemain in Paris at firstname.lastname@example.org
To contact the editors responsible for this story: Chad Thomas at email@example.com Robert Valpuesta, John Bowker