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ABN AMRO Capital acquires Dunlop Aircraft Tyres Limited

ABN AMRO Capital, the private equity business of ABN AMRO, has agreed to acquire Dunlop Aircraft Tyres Limited ("Dunlop"). ABN AMRO Capital will take a majority stake in the business with 74.6% ownership.  The transaction is expected to complete in June subject to customary approvals.  The Royal Bank of Scotland will provide senior debt facilities.

Dunlop specialises in the design, manufacture and testing of tyres, mainly for commercial aircraft.  In its 90-year history the company has achieved worldwide recognition, focusing on the aviation industry with a comprehensive product range. Dunlop has over 500 approvals covering more than 276 different aircraft. These range from historic aircraft through to the latest generation of modern passenger carrying jet aircraft. Dunlop's international customer base includes major international airlines, aircraft constructors, wheel and brake manufacturers and maintenance facilities.  Based in Birmingham, the 270-strong skilled workforce produces over 100,000 tyres each year.

The world market for aircraft tyres in the segments addressed by Dunlop is currently estimated to be US$ 500 mln with the main drivers of growth in the market being air traffic, which has grown at an average rate of 6% pa since the 1970's. This is expected to continue for the foreseeable future, with the Asian market growing more quickly in the next few years. Dunlop has a strong niche position as the only one of four global players to specialise solely in aircraft tyres. Regulation in the sector also creates very high barriers to entry, with Dunlop holding a strong, embedded position.

Patrick Bulmer, Dominic Collier and Grant Paul-Florence coordinated the investment on behalf of ABN AMRO Capital. Patrick and Dominic will join the board of Dunlop as non-executive directors. Ian Edmondson, formerly Vice President of Federal Mogul, will also join Dunlop as Chairman at completion.

Paul Southwell, Managing Partner of ABN AMRO Capital's UK buyout team, said: "Dunlop is one of only four global manufacturers of aircraft tyres, with significant potential for growth internationally. We have considerable experience and knowledge of the aerospace industry and are attracted by its long-term growth characteristics and embedded technology. Dunlop occupies an important niche within aerospace, with a highly defensible position and an internationally recognised brand.  We are keen to guide the business through the next stage in its development and look forward to working with management to realise that ambition."

Stuart Smith, Group CEO of Dunlop, said: "Dunlop is a long-established company with a long heritage in designing and manufacturing the highest quality aircraft tyres. We are excited to be embarking on a new phase in the company's history and are very pleased to have secured the support of a major financial institution. ABN AMRO Capital's backing is a significant vote of confidence for everyone involved in taking the business forward and recognition for those who have contributed to our success so far."

 

Press release issued by Dunlop Aircraft Tyres Ltd. on May 30, 2007

 

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Dunlop Aircraft Tyres Ltd. Tyres

 

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