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The Carlyle Group announced yesterday it has reached an agreement to sell its rubber-based industrial products subsidiary, Veyance Technologies, to German tyre manufacturer Continental Tyre for US$1.9 billion.
Veyance is the entity that was formed in 2007 for the spin-out of the Goodyear Tire Company’s industrial belting and rubber hose manufacturing division which was sold to The Carlyle Group then for US$1.5 billion.
Veyance operates globally in the field of rubber and plastics technology, and in 2013 recorded sales of approximately US$2 billion. About 90 percent of the company’s revenues are derived from industrial customers outside of the automotive industry. Veyance has 27 plants around the world and a workforce of about 9, 000 employees at the end of 2013. It has continued to use the Goodyear Engineered Products branding.
Dr. Elmar Degenhart, Chairman of Continental’s Executive Board in Hanover said of the deal, “Veyance’s business and geographic presence complements Continental’s existing global footprint, and the planned integration of Veyance into our ContiTech division will expand our position in rubber and plastics technologies on a worldwide basis. Furthermore this acquisition will enable Continental to come a step closer to its strategic goal of increasing further our proportion of sales to industrial customers and private end users. ContiTech itself will achieve some 60 percent of its sales outside the automotive OE sector in future.”
Martin Sumner, Managing Director of The Carlyle Group noted, “We are proud of what the Veyance management team has accomplished and believe the combination of Veyance and Continental will even more effectively meet customers’ needs globally.”
John S. Hamilton, Chief Executive Officer of Veyance Technologies Inc. said, “ContiTech and Veyance are a great fit for each other, ” … adding “In addition to the complementary geographic and product mix, we bring an organization and culture which delivers on our commitments to customers, employees, and our communities. We look forward to becoming valuable members of the ContiTech team to continue building upon our shared culture of innovation and providing value to customers.”
The acquisition is subject to the approval of the responsible anti-trust authorities and is expected to close during 2014.
This is a deal that Carlyle must be happy to have unloaded, as it bought in at the end of the last business cycle and the business itself must have had a tough time until recently. Continental is also a very good fit so both sides should be content.
About The Carlyle Group
The Carlyle Group is a global alternative asset manager, listed on Nasdaq, with US$185 billion of assets under management across 122 funds and 81 fund of funds vehicles at September 30th, 2013. Carlyle invests in a number of business segments and has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1, 450 people in 34 offices across six continents.
About David Rubenstein
David Rubenstein, co-founder and co-chief executive officer of The Carlyle Group, was born and raised in Baltimore, Maryland. He graduated from Duke University in Durham, North Carolina before going on to earn his law degree at the University Of Chicago Law School.
After graduation Rubenstein went on to practice law with Paul, Weiss, Rifkind, Wharton & Garrison in New York, and later became domestic policy advisor to President Jimmy Carter during the late seventies.
After Carter lost the Presidency to Ronald Reagan, Rubinstein established his own private law practice, before going into partnership with William E. Conway, Jr. and Daniel A. D’Aniello to form the Carlyle Group in 1987 as an alternative asset management and investment company.
Rubenstein is estimated to have a net worth of US$3 billion, and is recognized as being a member of the Giving Pledge, a group of wealthy Americans who have pledged to donate more than half of their wealth to philanthropic causes or charities during their lifetime.