BTR is paying pounds 60m in cash and taking on about pounds 50m of borrowings to buy the businesses, which manufacture sealing systems, hoses and anti-vibration mounts, mainly for the car industry.
At the same time, it is raising dollars 15.4m ( pounds 8m) through the sale of its interest in Richmond Power Enterprise, part of the Hawker Siddeley acquisition completed last year, to Enron Richmond Power Corp, which is also taking on Hawker's debt, believed to be dollars 130m.
The Pirelli businesses made an operating profit of pounds 1.3m on sales of pounds 285m in 1991, and have net assets of about pounds 100m. German companies accounted for 80 per cent of its business although it also has interests in Spain and the UK - Metzeler (UK) in Peterborough - and employs about 4,600 people.
Alan Jackson, chief executive of BTR, said the Pirelli acquisition gave the group a substantial automotive business in Europe which would complement its existing interests in the US. 'It accords with our objective of strengthening our presence in the original equipment manufacturing arena in continental Europe.'
He added that he expected 'big opportunities to enhance the performance' of the business, largely by increasing productivity. BTR's US automotive profiles business has margins of about 15 per cent, compared with less than 1 per cent at Pirelli.
Continental had been conducting a due diligence investigation of the businesses. It is keen to expand in the area and is likely to be disappointed to have been beaten by BTR.
Richmond Power, based in Virginia, operates a co-generation plant and had been earmarked for sale by Hawker before the takeover. Its net assets had been written down to nothing by Hawker. It is the fourth Hawker Siddeley business to be sold so far - others include Delta, its joint venture cables business - and Mr Jackson said there were 'small bits' to sell.Reuse content