Known in Western Canada mostly for its tracks, from farm machinery to snow machines, the Canadian company known as Camso has been bought by Michelin.
Once known as Camoplast and Solideal, the Quebec company became Camso in 2015, but has been in business for decades as tire and OEM and aftermarket provider of tracks and track systems.
Camso has about 11 percent of the global off-road tire and track market, making it a good fit for tire-maker Michelin, which has a limited farm and construction industry profile.
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In a sale worth US$1.45 billion, Camso’s Magog, Que., home will become headquarters for Michelin’s global off-road tire operations. In Canada, the French company has been run from Laval, Que., and has a tire plant in Nova Scotia.
Jean-Dominique Senard, chief executive officer of Michelin, said the Camso purchase will allow rapid expansion of his company in the off-road sector and potentially create an opportunity to expand in Canada, once the sale has been completed and the Canadian operations sorted out.
He said the companies, when combined should deliver Michelin $55 million in overall savings and operational efficiencies.
Camso now builds about $250 million in products for the agriculture, ATV and snowmobile market, with the remainder of its $1 billion in sales coming from forklift and construction tires.
The sale comes in at about an 8.3 times the company’s EBITDA (earnings before interest, taxes, depreciation and amortization) after the new efficiencies are taken into account.
Pierre Marcouiller, who heads Camso, said there is little to no crossover between the two company’s off-road product lines, increasing the value to Michelin and its shareholders for this type of acquisition.
Michelin estimates that it will have about 15 percent of the $13 billion annual off-road rubber market when the deal is done.
Camso had 22 plants and 7,500 employees. Michelin employs about 4,500 in its off-road business and has four factories.
He said the Camso products will see advantages of Michelin’s abilities to invest in research and development for farm and other off-road tires and tracks.
