Japan based tire manufacturer Bridgestone has said that they are acquiring Bandag Inc, which specializes in making tire retreading materials and equipment.

The deal is worth around $1.05 billion and it would be conducted through a cash transaction. After this announcement, the Bandag shares jumped $5.51, or 12.2 percent, to $50.55 in early trading on the New York Stock Exchange.

Bridgestone’s offer puts the share price of the company at $50.75 per share.

Bandag had sales of around $921 million last year and after the completion of this deal, it would become a part of Bridgestone Americas. The deal is expected to close by the middle of next year.