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KKR buys Alliance Tire Group from Warburg Pincus in $500m deal

12 Apr 2013

Alliance TireUS buyout house KKR has agreed to buy a controlling stake in India’s Alliance Tire Group from Warburg Pincus in a deal which will reportedly see it hand over $500m.

Alliance founder Yogesh Mahansaria will continue to lead the group following the buyout, which will see KKR take a 75 per cent stake using just over $300m of its own money according to Reuters.

The company employs more than 2,500 people worldwide manufacturing a range of off-road tires for the agricultural, forestry and construction industries.

KKR’s buyout will be the biggest private equity buyout in India since Bain Capital picked up a 30 per cent stake in business process outsourcing company Genpact for $1bn last August.

The firm made the deal through its $6bn-targeting Asia Fund II, which has gathered more than $5bn of commitments according to a US securities filing earlier today.

It said the buyout was supported by a financing tranche led by Crescent Mezzanine and backed by the Ivy High Income Fund.

KKR India head Sanjay Nayar said, “ATG is a leader in an attractive industry with strong underlying growth drivers.

“We are thrilled to be partnered with Yogesh and his management team and look forward to leveraging our global network to support their continued growth.”

Credit Suisse served as the financial advisor to ATG, while Nine Rivers Capital advised the company founders. Barclays Bank and JP Morgan served as advisors to KKR for the transaction.

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