Sale of SmarTire Systems is now final

ERJ staff report (TB)

Richmond, British Columbia (Dec. 12, 2008) - Germany's Knorr-Bremse Group has finalised its deal to buy tyre pressure monitoring systems (TPMS) developer SmarTire Systems Inc. for $2.5 million.

Munich-based Knorr plans to incorporate SmarTire Systems into the electronics business unit of its Bendix Commercial Vehicle Systems LLC affiliate. The move will complement the firm's other vehicle safety technologies, such as the Bendix ESP Electronic Stability Program and Bendix Adaptive Cruise Control, Knorr said.

SmarTire expects to apply all, or substantially all, of the proceeds from the sale against its debt obligations. Proceeds from the sale closing will be held in escrow subject to SmarTire obtaining consent of its shareholders at a meeting to be held in March, SmarTire said.

“The SmarTire asset acquisition is another mark of our continued commitment to provide our customers with a full range of innovative commercial vehicle braking system solutions. We strongly believe in the potential of this technology,” said Joe McAleese, Bendix president and CEO, in a prepared statement.

“Tyre pressure and temperature monitoring technologies - applicable for power vehicles, trailers, trucks, buses, and RVs - are efficient and cost-effective means to help reduce fuel consumption, enhance brake system performance, and reduce fleet operating costs,” said Scott Burkhart, vice president, controls business unit at Bendix.

Bendix said it believes TPMS - already mandatory on passenger vehicles in North America - is one of the technologies needed to help it achieve comprehensive commercial vehicle advanced safety technology. TPMS is being reviewed by the National Highway Traffic Safety Administration (NHTSA) and the Federal Motor Carrier Safety Administration as part of an investigation into the mitigation of tire failure in commercial vehicles. In the European Union, a current initiative aims to ensure a mandate requiring TPMS in passenger vehicles.

Bendix did not comment on the sales potential for the acquired business. SmarTire reported $2.46 million in sales for the first nine months of fiscal 2008.

Elyria, Ohio-based Bendix Commercial Vehicle Systems develops and supplies leading edge active safety technologies, air brake charging, and control systems and components under the Bendix brand name for medium- and heavy-duty trucks, tractors, trailers, buses and other commercial vehicles throughout North America.

From Tire Business (A Crain publication)

Press release gtom Bendix