American Tire Distributors Is Being Sold; IPO Put ‘On Hold’
By Gary Molinaro | April 28th, 2010 | Category: Service Executive News | No Comments »TPG Capital, the global buyout group of the private investment firm TPG, has signed a definitive agreement to acquire American Tire Distributors Holdings (Charlotte, NC) from a group of private equity firms. The transaction, which is expected to close this quarter, is valued at roughly $1.3 billion. The deal is subject to customary conditions, including receipt of applicable regulatory approvals. As a result of this announcement, the planned initial public offering of American Tire Distributors stock has been suspended.
American Tire Distributors — which delivers replacement tires to local, regional and national tire retailers — bills itself as the country’s largest independent tire distributor. It has 83 distribution centers serving 37 states. The company is currently owned by affiliates of private equity firms Investcorp, Berkshire Partners and the Greenbriar Equity Group.
Its potential new owner, TPG, is one of the largest private equity groups globally. It has more than $48 billion of assets under management and offices around the world. The firm, which formerly went by the name the Texas Pacific Group, has bought a number of well-known companies over the years, including Burger King, Neiman Marcus and Harrah’s Entertainment.
William Berry, president and CEO of American Tire Distributors, called the deal an exciting time in the evolution of the company. “We welcome our new partners at TPG, who share the same vision we do for the continued growth of the American Tire Distributors brand as significant growth opportunities remain and we continue to seize opportunities, such as geographic expansion and online sales,” Berry said.
“American Tire Distributors is a market leader that has demonstrated its ability to perform well over an extended period of time,” said Kevin Burns, a partner at TPG. “We’re investing behind a great management team, and we look forward to working with them to continue to expand this successful franchise.”
The transaction has fully committed financing, consisting of a combination of equity to be invested by TPG Capital and debt financing to be provided by affiliates of Bank of America, Barclays Capital, General Electric Capital Corp., RBC Capital Markets, UBS and Wells Fargo Capital Finance.
