Warburg, Mahansarias complete buy-out of Alliance Tire

Hadera, Israel, July 11th, 2007: Alliance Tire Company (1992) Ltd. announced today that it has been acquired by Warburg Pincus, the global private equity firm, and Yogesh Mahansaria, former CEO of Balkrishna Tyres. The transaction was valued at approximately $150 million. Warburg Pincus and the Mahansarias envisage that additional capital will be invested to fund future expansion and development of low-cost sourcing capabilities in India.

Based in Hadera, Israel, Alliance Tire Company has more than 50 years of experience in developing, manufacturing and marketing a wide range of specialty off-highway tires and passenger vehicle tires for customers in over 65 countries. Within the off-highway tire segment, the company's product line includes a wide range of radial and diagonal tires with over 1,000 active SKUs serving the agricultural, forestry, mining and construction industries. A greenfield facility is proposed to be set up in India to augment the existing production in Israel for the manufacture of Specialty Off-Highway Tires.

This transaction represents a unique combination of an Indian entrepreneur partnering with a global private equity firm in acquiring assets overseas. Further, the transaction combines a leveraged buy-out with the provision of growth capital.

Joseph Anglister, President, Alliance Tire Company said: "We welcome the new ownership. An investment by a leading international investor such as Warburg Pincus combined with Yogesh Mahansaria's extensive experience in the off-highway tire industry will provide an impetus to our long-term objective of growing Alliance's product library, strengthening our relationship with existing customers and tapping new markets."

Commenting on this investment, Yogesh Mahansaria said: "Alliance is an exceptional company, with a highly respected brand, strong product knowledge, talented employees and significant potential for growth. I am excited to partner with Warburg Pincus, a distinguished firm with a proven track record in supporting entrepreneurs to build successful businesses. Warburg Pincus' extensive global network and flexibility in providing capital for a leveraged cross-border buy-out as well as for funding growth was instrumental in completing this transaction."

Julie Johnson Staples, Head of Communications, Warburg Pincus said: "We have been impressed by Yogesh's deep domain knowledge and passion for entrepreneurship during our association with him. Alliance, with its strong brand, product portfolio, and vast distribution network, provides a unique platform to build a global off-highway tire business. Warburg Pincus is a long-term, value-driven investor and we look forward to working with Yogesh and the company going forward."

Cipher Capital Advisors acted as financial advisor and Amarchand Mangaldas provided legal advice for the transaction. Poalim Capital Markets, Tel Aviv and Goldfarb, Levy, Eran, Meiri & Co. served as local advisors in Israel.

About Alliance Tire Company: The Alliance Tire Company employs 950 people, and its annual turnover is over $160 million. The company has more than 50 years of experience in advanced production and marketing of a wide range of agricultural, multi-purpose and industrial tires for export, and passenger and light truck tires for the local market. Alliance exports to more than 65 countries around the world including markets in Europe, the USA, Japan, and Latin America.

About Warburg Pincus: Warburg Pincus has been a leading private equity investor since 1971. The firm currently has approximately $20 billion of assets under management having nine offices around the world. Since inception, Warburg Pincus has invested $26 billion in 570 companies in 30 countries and across a range of sectors, including financial services, information and communication technology, healthcare, consumer, industrial, media and business services, energy and real estate. Warburg Pincus is an experienced partner to entrepreneurs seeking to create and build durable companies with sustainable value. The firm has offices in New York, San Francisco, London, Frankfurt, Hong Kong, Beijing, Shanghai, Tokyo and Mumbai, and an active portfolio of more than 100 companies. Over a twelve-year period, funds sponsored by Warburg Pincus have invested approximately USD 1.5 billion in India making it one of the largest private equity investors in the country. The firm's past and current investments in India include Bharti Tele-Ventures, Gujarat Ambuja Cements, Housing Development Finance Corporation (HDFC), Kotak Mahindra Bank, Max India, Moser Baer, Nicholas Piramal, Sintex Industries, Lemon Tree Hotels and WNS Global Services. For more information please visit www.warburgpincus.com.