Background

• Titan Europe Plc, together with its subsidiaries, manufactures, assembles and sells steel wheels, and undercarriage components and assemblies for the agricultural, construction, military, forestry, and mining industries worldwide. Its products include agricultural wheels, brakes, construction and idler wheels, components for tracked vehicles, agricultural vehicle brakes, and tires.

• Italtractor ITM manufactures rollers, chains, sprockets, idler, track shoes and fasteners. The products undergo rigorous testing procedures, ensuring that the products are suitable for the agricultural industry. The products are sold in Italy and the United States, under the brand name Dozco.

Process & Outcome

• In December 2005 Close Brothers advised Titan Europe plc on the acquisition of Italtractor ITM S.p.A. for a total consideration of €272m. Under the AIM rules, the acquisition constituted a reverse takeover. To fund the acquisition Titan Europe plc raised €100m of equity by way of a placing (the largest secondary fundraising on AIM to date) and agreed new credit facilities of €170m.

• Close Brothers was appointed as lead adviser on the acquisition in July 2005; the key elements of their role included advising on the following: the overall process and timing of the transaction, the negotiation of the terms of the transaction with the counterparty, the funding structure, the structuring of the transaction (in particular the decision to arrange a €100m bridging facility to minimise Italian tax exposure in 2006), the negotiation of the new debt facilities and project managing the €100m equity raising process.

Testimonial

“The acquisition of ITM Italtractor had a number of particularly challenging facets; the complex capital structure of the target, in particular the presence of the bond, a substantial equity raising, the cross-border element and the fact that the transaction was a reverse takeover. Against a backdrop of a very challenging timetable, Close Brothers project managed these various aspects of the transaction expertly and efficiently and were able to add real value throughout the process”

Mike Akers, CEO, Titan Europe plc

For more information regarding this transaction, please contact Simon Tilley on +44 (0)20 7655 3105