Reynoldsburg, Ohio – Kenda Tires has acquired Starco Europe, a Brabrand, Denmark-based supplier of wheels for applications ranging from wheelbarrows and mowers to large agricultural and industrial machinery, Kenda announced 2 Oct.
With 550 employees and sales, in 2016, of €110 million, Starco operates factories in the UK, Croatia, Sri Lanka and China, as well as eight sales and distribution locations across Europe.
In a written reply to ERJ’s enquiry about terms of the deal, Kenda boss Jimmy Yang said the Taiwanese company’s board had authorised up to €18 million for the acquisition.
“Both parties did reach to a satisfactory price to complete the transaction," added Yang, who is vice chairman of Kenda Rubber Ind. Ltd and president of Kenda USA
The deal gives Kenda – a Starco supplier since 1982 – expertise in applications, polyurethanes and wheel design. The combination with Kenda’s tire development capabilities, it said, will give the group a "unique position in the market."
The move is also intended to enhance Kenda's position in Europe, which represents a relatively small share of its overall global sales – posted at around €890 million in 2016.
“We recently launched our Focus on Europe strategy [and] the acquisition of Starco is a natural step to more quickly establish a platform [for] better access to the market in this region,” said Kenda's chairman.
“Kenda has strong market share in [the] USA in trailer, lawn and garden, golf car, utility vehicle tire [marketss] and would like to grow its market share in these areas ,” Yang added in a press statement.
Starco’s management team will report to Kenda USA, though the acquired business does not expect organisational changes or redundancies related to the acquisition.
Starco CEO Richard Todd sees many opportunities under Kenda, including from an increased global presence, improved distribution and new market insight.
“Kenda gains new opportunities in Europe and Starco in the US. This will allow us to serve customers globally,” said Todd, stressing that Starco would continue to operate in its existing markets and retain current suppliers.
For Kenda, Yang concluded: “By joining forces, we believe we can achieve global market leadership in various market segments – today we serve some of the same OEMs, the same type of customers and we believe our service and offering to them will be even better.”