Charlotte-based Carlisle Cos. said Monday that a New York company is buying its tire division in a $375 million deal that will take Carlisle out of the business on which it was founded.
American Industrial Partners is expected to pay cash for the company's transportation products segment, Carlisle said. The deal still needs regulatory approval.
When it released second-quarter results in July, Carlisle announced that it was seeking a buyer for the segment, which has produced disappointing results. Specifically, Carlisle has lamented that Chinese tire manufacturers have made it hard for it to grow profit margins for lawn and garden tractor tires - what Carlisle refers to as "outdoor power equipment."
Carlisle, in the second-quarter announcement, described its transportation products segment, which makes the tires, as "no longer a strategic asset." Among other things, the segment also makes tires for all-terrain vehicles and boat and horse trailers, but not for use on automobiles.
In a statement Monday, David Roberts, Carlisle president and CEO, described the segment as "not core to Carlisle's growth strategy nor supportive of our long-term operating profit goals and expectations." He said the sale will help Carlisle invest in faster-growing businesses with higher profit margins.
In 2012, the transportation products segment had sales of $778 million and a profit margin of 6.7 percent, down from 9.4 percent in 2003 and below the double-digit margins the company's other segments produced last year.
Carlisle has said the sale of the segment will reduce its employment by one-third. Carlisle employs roughly 12,000 worldwide. Of those, about 4,400 work for the transportation products segment.
No Carlisle tires are made in Charlotte, so the company has said it does not expect jobs in the region to be lost in a sale. The tires the company makes in China are assembled to wheels in a plant in Aiken, S.C., that employs 188 people. The company also has plants elsewhere in the U.S. One in Clinton, Tenn., makes tires for all-terrain vehicles.
Started in 1917 in Carlisle, Pa., Carlisle has its roots in selling inner tubes for automobiles, but it has grown into other lines of business since then.
It will have four remaining segments after the sale: Its construction materials segment makes roofing products. Another sector makes cable and wires for commercial and military aircraft. Another sells brake and friction systems used mostly by the mining, construction and agricultural industries. Another sector provides dishes, cookware and other supplies to restaurants and hospitals.
The sale is expected to be finalized in the first quarter.
Carlisle reports third-quarter earnings results Tuesday. Shares of Carlisle slid 0.14 percent Monday to $71.94.