KKR, Temasek in the race to buy Warburg’s stake in Alliance Tire for around $400 mn: report

Private equity firm KKR & Co and Singapore's sovereign wealth fund Temasek Holdings are separately in advanced talks to buy Warburg Pincus' majority stake in Mumbai-based tyre maker Alliance Tire Group (ATG) for about $400 million, Reuters today reported, citing three sources with direct knowledge of the matter.

Other interested bidders include private equity firms Advent International and TPG Capital, said the report. Two other minority investors may also sell their stakes in Alliance, giving the buyer around 75 per cent of Alliance Tire.

New York-based private equity firm Warburg Pincus had acquired the stake in 2007 for approximately $150 million.

ATG develops and manufactures a wide range of off-highway tyres, primarily for the agricultural, construction and earth-moving sector. It is a leading global off-highway tire manufacturer supplying over 1,000 different types of tires to a customer base spread across 90 countries.

Warburg Pincus partnered with Yogesh Mahansaria, former CEO of Balkrishna Tyres to fund the initial acquisition of Hadera, Israel-based Alliance Tire Company and the subsequent development of a greenfield, low-cost manufacturing facility in India.

ATG has two manufacturing plants, one each in India and Israel, and its tyres are also  manufactured in China and Taiwan through contract manufacturers.

It has a turnover of more than $600 million and a presence in over 120 countries, according to its website.