Titan International, Inc. (NYSE: TWI) has confirmed the divestiture of its Australian Wheel business. The company will sell its business to OTR Tyres which is a local leading national tire, wheel, and service provider. The decision to divest its business comes after the company discussed with its Board of Directors, that the Australian Wheel business will be better in the hands of a local market leader who can continue to build and grow the company in the future.
The company has started a number of initiatives in recent years to improve its financial performance of this company, including abandoning the tire servicing sector and discontinuing less profitable items. Its Australian management team has constantly made decisions that have steered the company in the right direction.
Furthermore, in Australia, the company will continue to run its undercarriage business, and the sale of this business will have a minor impact on Titan tyre sales. It congratulates all of Titan's hardworking workers for their efforts to the company's success, and it wishes them all the best in their future endeavors with OTR Tyres.
Additionally, the transaction comprises about A$23 million in gross profits and cash to be repatriated, as well as the assumption of all liabilities, including employee and lease commitments. The purchase price is contingent upon a standard post-closing review, as well as potential adjustments to target working capital and the release of certain restricted cash tied to lease guarantees. The transaction's profits are likely to be used mostly to pay down debt and pay advisory costs.