SmarTire Systems Inc. and TRW announced today they will restructure the strategic alliance that began in 1998, which allowed TRW to market SmatTire’s technology to OEMs. The move allowsSmarTire to take advantage of recent U.S. legislation that will that will require tire pressure monitoring systems be installed on all new vehicles after November 2003.
SmarTire is buying its marketing rights back from TRW for $3.3-million in cash and debt, and TRW is retaining its significant equity position in SmarTire.
The company said the restructuring is a key strategic step for the British Columbia-based company and will leverage the recent Transportation Recall Enhancement Accountability and Documentation (TREAD) Act.
The government mandate has created an unprecedented market opportunity for the few suppliers of tire monitoring systems, and the restructuring with TRW provides SmarTire with complete global market access, SmarTire president & CEO Robert Rudman said.
. “The TREAD Act has dramatically changed the landscape of our industry and has created an immediate demand for tire monitoring,” Rudman said. “We felt the timing was right to restructure our alliance in an effort to better meet this demand while maximizing the market opportunity for both companies.”
SmarTire develops and markets tire monitoring systems for all sectors of the automotive and transportation industries.