KKR, the American private equity firm has announced it will be purchasing a 90% stake in Alliance Tire Group. The previous owner is Warburg Pincus and owner Yogesh Kimar Mahansaria.
The enterprise value of the purchase is US$650 million, including a debt load of US$125 million, as confirmed by two individuals familiar with transaction who spoke on condition of anonymity. One of the individual said, "The deal is likely to be announced this week as all the three sides have agreed on the financial terms and have more or less completed the legal formalities."
The acquisition is a leveraged buyout, where the acquirer finances the deal through a mixture of equity and debts with interest cost of funds would be paid by the company acquired.
The leveraged buyout would see Warburg Pincus divesting its 80% shareholders while Indian promoters would sell 10% of its shareholdings and at the same time keeping the 10%.
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