Michelin to acquire Quebec firm

Deal for Camso further diversifies tire company

PARIS— Michelin agreed to buy Camso, a Canadian producer of rubber tracks for farm equipment and snowmobiles, for $1.9 billion as the French tiremaker bolsters its specialty-equipment business.

The two companies’ off-road operations will be combined and run from Camso’s headquarters in Magog, Que., Michelin said in a statement Thursday. Closely held Camso, which also makes tires for material-handling equipment, has sales of $1.3 billion.

“This acquisition is a wonder- ful mutual opportunity,” Michelin chief executive officer Jean-Dominique Senard said in the statement. “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.”

The acquisition is the second deal of more than $1 billion announced by Michelin this year, and both of them diversify the Clermont Ferrand, Francebased company away from car and truck tires. Michelin agreed in March to buy U.K.-based conveyor-belt maker Fenner Plc for about $2.1 billion , strengthening the buyer’s presence in mining equipment.

Camso ranks among the top three companies in making tracks and tires for construction equipment, Michelin said. The company, which has a manufacturing site in Sri Lanka, has grown at an average of 7 per cent a year since 2012.

The deal values Camso at $2.2 billion including net debt, Michelin said, which equals 8.3 times earnings before interest, tax, depreciation and amortization, after synergies. Michelin forecasts $72 million of savings and increased sales by 2021.