Sava based in Ljubljana, Slovenia, one of the more important publicly listed companies in the country, announced the sale of its rubber manufacturing division Sava Technical Rubber.

The buyer CGS, based in Prague in the Czech Republic, is a multinational rubber manufacturing group producing special purpose tires and technical rubber products. The buyer paid a purchase price of approximately €70 million for the shares in Sava Technical Rubber, and also assumed all the financial liabilities of the company.

CGS won the formal bidding process with an offer encompassing the best terms and conditions and a convincing concept for the long-term strategic development of Sava Technical Rubber and its employees. The transaction structure includes a modern warranty insurance solution provided by CGS combined with guarantees for the Sava Technical Rubber location and employee continuity.

EquityGate acted as exclusive financial advisor in the deal, which is one of the largest industrial mid-cap M&A transactions in Central & Eastern Europe (CEE).

The transaction was complex because parallel to the sales process, negotiations took place with the site partner Goodyear, based in the USA, on the continuation of numerous supply and service agreements as well as negotiations with the banking pool on the release of shares and assets in Sava Technical Rubber which they held as collateral.

The sale of Sava Technical Rubber represents one of the major milestones in the restructuring strategy of Sava d.d. which will continue until 2014 and which was developed by EquityGate's Debt Advisory team and agreed on at the beginning of 2012 by the shareholders and the banks.

Sava Technical Rubber is a manufacturer of specialized industrial rubber components with sales of approximately €130 million and EBITDA of €16 million last year.