Michelin buying off-road tire maker Camso in €1.2bn deal

Clermont-Ferrand, France - Groupe Michelin has struck a deal to buy Camso Group, the Magog, Quebec-based off-road tire and rubber track producer, and plans to combine the business with its own OTR tire activities into a new division to be based in Quebec.

Michelin has agreed to pay $1.45 billion (€1.24 billion) for Camso, which the French company said represents an enterprise value of $1.7 billion, or a multiple of 8.3 times EBITDA after synergies. The transaction will not impact Michelin’s financial position.

Michelin said the deal --- which is still subject to “customary approvals” --- will create a leader in OTR mobility solutions, with 26 plants, roughly 12,000 employees and annual sales exceeding $2 billion.

Through studies and discussions with Camso, Michelin has identified significant opportunities to increase sales and reduce costs, thereby unlocking up to $55 million in synergies by 2021.

“Michelin and Camso have many values in common,” Micheln CEO Jean-Dominique Senard said. “This acquisition is a wonderful mutual opportunity. Michelin will benefit from all of Camso’s skills in the off-the-road mobility markets and Camso from the full range of Michelin’s expertise in the specialty markets.”

Camso Executive Chairman Pierre Marcouiller called the deal a “fantastic opportunity for Camso because of the similarity of our cultures as well as our growth potential.

“Camso will achieve its ambition to become the global off-the-road market leader and will contribute its dynamic teams, its technical and manufacturing assets and its customer-focused mindset. The transaction has received the backing of all Camso’s shareholders.”

The business will benefit from the expertise of Camso’s management team and Michelin’s long-standing presence in Canada, both in Laval, Quebec, and in Nova Scotia, Michelin said.

Formerly known as Camoplast Solideal Inc., the Quebec company relaunched itself in 2015 as Camso and launched an identity campaign pitching itself as the “Road Free” company.

With annual sales of $1 billion, Camso is a market leader in rubber tracks for farm equipment and snowmobiles, and in solid and bias tires for material handling equipment. It also ranks among the top three players in the construction market, in track and tire solutions for small heavy equipment, according to Michelin.

The company has more than 7,500 employees in 27 countries at 24 manufacturing plants — including tire plants in Argentina, Brazil, China, Sri Lanka and Vietnam— four research and development centers and dozens of distribution offices in more than 100 countries. Its US headquarters and primary tire distribution center are in Charlotte, North Carolina.

The company traces its roots to 1982 when a pair of entrepreneurs formed Camoplast and acquired the track business of Bombardier Ltd., focusing on snowmobile track systems. It’s been expanding at about 7% a year since 2012.