Sumitomo Takes Over Micheldever Group Ltd

Sumitomo Rubber Industries, Ltd. which owns prominent tire brands like Falken has announced that it will be taking over Micheldever Group Ltd. from Graphite Capital Management LLP in a GBP 215 million deal. The tire manufacturers is acquiring Micheldever as part of its drive to strengthen the Falken tire brand in the UK.

Micheldever Group is aholding company that is involved in wholsale and retail sales of tires through its retail subsidiary, Micheldever Tyre Services Ltd. (MTS). MTS sells about 6 million tires in the UK, which accounts for about 20 per cent of the total number of tires sold in the UK market. The company had 1,574 employees as of last year and had achieved sales of about GBP 320 million in the financial year that ended on 31 March 2016.

From a wholesale perspective, MTS has a well established network that comprises 15 warehouses spread across the UK. The company supplies tires to 6,000 retailers across the nation and delivers these tires using its own fleet of 225 vehicles. MTS also own the fastest tire retail chain in the UK, with the number of outlets in the Protyre network growing from 63 in 2014/15 to 88 in 2015/16 and set to reach the 100 mark this year.

SRI had dissolved an alliance agreement with Goodyear in October 20154 and this made the acquisition of Micheldever easier, as this gave the Japanese tire manufacturer greater freedom to pursue its ambition to expand its business in Europe. The purchase of Micheldever is an integral part of Sumitomo’s “Business Expansion in Europe and North America” action plan, a part of its long-term Vision 2020 strategy.

Graphite Capital had led the management buyout of Micheldever in a GBP 85 million deal that took place in February 2006.