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Goodrich to Sell Tire Operations to Investor Group

December 23, 1987|Associated Press

AKRON, Ohio — B. F. Goodrich Co. said Tuesday that it plans to sell its 50% interest in Uniroyal Goodrich Tire Co. to an investor group for more than $225 million in cash plus warrants.

The tire operation is being acquired by Clayton & Dubilier Inc., the New York-based investment firm that took Uniroyal Inc. private in 1985 after an unsuccessful takeover attempt by corporate raider Carl C. Icahn.

In addition to the $225 million in cash, Goodrich is to receive warrants that can be used to purchase a 7% interest in Uniroyal within seven years of the sale, Goodrich said in a news release.

After the sale and recapitalization, which require approval from regulators and the boards of both companies, Uniroyal managers and investors represented by Clayton & Dubilier will hold a majority interest in the company.

B. Charles Ames, one of the firm's partners, will become chairman and chief executive of Uniroyal, a Clayton & Dubilier spokesman said.

Patrick C. Ross, the former chairman and chief executive of Uniroyal, will continue to serve as a consultant, and Sheldon R. Salzman will continue as vice chairman and chief operating officer, according to a statement issued by Clayton & Dubilier.

No further management changes are expected, the statement said.

John D. Ong, Goodrich chairman and chief executive, said Goodrich decided to sell its share in Uniroyal so that it could focus on its chemical and aerospace businesses.

"The Clayton & Dubilier offer fits our strategy and will allow us to accelerate the growth of these core businesses," he said.

Goodrich and Uniroyal Tire combined their tire businesses in 1986. The joint venture, which has 19,000 employees and projected 1987 sales of $2 billion, is the second-largest producer of automobile and light truck tires in North America.

Clayton & Dubilier is a private firm that specializes in management buyouts. Since it was formed in 1978, the firm has acquired 12 businesses whose sales total $4 billion.

The firm's management-led buyout of Uniroyal two years ago was valued at $950 million.

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