Kohlberg Kravis Roberts has bought an undisclosed controlling stake in global tire maker Alliance Tire Group from Warburg Pincus, according to a joint statement.
KKR declined to comment on further details of the deal, and Warburg Pincus could not be reached for comment by press time.
The exact size of the deal was undisclosed. But a source close to the matter told Private Equity International that total enterprise value was between $600 million and $700 million.
Warburg Pincus is believed to have initially invested around $100 million in Alliance in 2007, after which it helped develop a greenfield, low-cost manufacturing facility in India. In 2009, Warburg invested an undisclosed amount of additional capital to fund the acquistion of the off-highway tire assets of U.S.-based GPX Corporation.
In all, the exit would give the firm close to a 4x return on the deal, according to an industry source.
About $300 million of KKR’s funding for Alliance was from the firm’s Asia Fund I, while the remainder was debt funding from Crescent Mezzanine and the Ivy High Income Fund, according to PEI’s sources.
Alliance supplies off-highway tires, catering primarily to the agricultural, forestry and construction industries globally. It has operations in Israel, South Africa and the US, but the centerpiece of the deal is the India operations, which include manufacturing and research and development facilities.
“[We] look forward to leveraging our global network to support their continued growth,” Sanjay Nayar, head of KKR India, said in the statement.
In India, Warburg Pincus has invested $3 billion across eight deals, including banks, hotels and healthcare companies, since 1996.
The Alliance deal will be the last to come from KKR’s Asia Fund I. KKR is nearing a final close on its $6 billion Asia Fund II, which will be the largest amount ever raised for the region.