JK Tyres have announced the acquisition of Cavendish Industries Ltd. (CIL). Currently, JK Tyre has twelve facilities around the globe with nine in India and remaining three in Mexico. The acquisition was done at an enterprise value of Rs. 2,200 crore.
Back in September 2015, Kesoram Industries Ltd. signed an agreement with JK Tyres. The deal was one hundred percent equity acquisition of Cavendish Industries Ltd. CIL has three tyre business undertaking with Birla Tyres.
Under the deal JK Tyres will offer funds to deal with debts and internal accruals. Currently, CIL has a facility located in Laksar, Haridwar and manufacturers flaps, tyres, and tubes. The goal is to utilise the manufacturing facility more efficiently.
The acquisition of CIL by JK Tyres will help the later enter the two/three-wheeler tyre segment. JK Tyre will use CIL facility as an additional manufacturing capacity for its truck and bus radials tyre market. With the acquisition JK Tyre will have an overall portfolio in the tyre market.