Why Dealer Tire May Be Up for Sale, or Not Up for Sale

Bob Ulrich
Posted on February 13, 2018

A recent story by a national news organization about Dealer Tire LLC was very likely a non-story. But it sheds some light on how news items can be misleading.

The story's headline was: "Lindsay Goldberg is considering a $2 billion sale of Dealer Tire." In our industry, that would be big news. Dealer Tire sells millions of tires to car dealerships across the country every year.

There are potential problems with the story, however. First, to the best of my knowledge, Dealer Tire principals Scott and Dean Mueller own a majority interest in the privately-held company. We do know Lindsay Goldberg LLC became an investment partner in 2014 when it invested a "signifcant" amount of money in the company.

What does significant mean? At the time of the investment, Dealer Tire revealed it would use a portion of the investment to purchase the interests of TA Associates, which bought a minority stake in Dealer Tire in 2009. So the percentage of the business owned by Lindsay Goldberg was at least greater than the percentage TA Associates owned.

I doubt the Muellers ever gave up control of the company, although we can't know for sure because it is not a public company. And there is nothing to indicate TA Associates ever increased its minority interest into a majority interest.

According to the recent story, Lindsay Goldberg "agreed to buy Dealer Tire from peer TA Associates in 2014." Perhaps the writer assumed Lindsay Goldberg owned the company, or meant the firm agreed to purchase a financial stake in the company. But there is nothing in the story corroborating who owns Dealer Tire. That is crucial to the idea that Lindsay Goldberg may be putting Dealer Tire on the market.

Since Dealer Tire doesn't have to report either its financial results or the makeup of its ownership, we can't know for sure. But we can do more than just speculate. Based on following the company for nearly 20 years, and how it conducts itself in the marketplace, and what information the company has released over the years, I would say the Muellers have the ultimate say in selling the company. Until this story, there has never been anything suggesting otherwise.

Second, the story goes on to say the New York-based private equity firm "has held talks with financial advisers about strategic options for the business," which almost all companies do all the time. That's not necessarily news, and it is especially not news if Lindsay Goldberg does not own controlling interest in Dealer Tire.

Did Dealer Tire' s ownership, whoever it is, want to throw the $2 billion sales price out into the market just to see what they could get for the company if they ever decided to sell? That's possible. That's often how a company tests the waters about a sale. In this case, that could mean Lindsay Goldberg had the blessing of management to "leak" a few details of the discussion.

The information from this recent item when compared to information from past news items -- which came from Dealer Tire -- just doesn't add up at this point. Because we don't have all the details, we can't be sure whether "Lindsay Goldberg is considering a $2 billion sale of Dealer Tire" is a non-story -- or a blockbuster story.

Related Topics: car dealers, Dealer Tire, Dean Mueller, Lindsay Goldberg, Private equity firm, Scott Mueller

Bob Ulrich Editor
Comments ( 0 )
More Stories
Publisher David Wilson believes there is still a future for tire retreading as a profitable business.

Tyrexpo Africa: A Global Viewpoint on Retreading

In preparation for Tyrexpo Africa, to be held April 10-12, 2018, at the Gallagher Convention Center in Johannesburg, South Africa, David Wilson, publisher and editor at Retreading Business and the publisher for three specialist magazines for the tire industry, shares his views on the overall outlook of the global commercial tire retread market.

In addition to warning its employees on the dangers of texting and driving, Ramona Tire promotes that message to the public with its “Please make it home safe today” digital billboard on I-215 west of Hemet, Calif. (see sidebar).

How Is the ‘Health’ of Your Business Insurance Coverage?

Many of us make it a point to see our doctor for regular checkups. Doing so gives the physician the opportunity to assess the current condition of our health, and gives us a chance to ask questions about medical issues or concerns. A thorough exam can help to diagnose early symptoms and gives the doctor an opportunity to offer recommendations and advice for a healthier lifestyle.


Formula 1 Pirelli Hot Laps to launch in 2018

Formula 1 is delighted to announce the Formula 1 Pirelli Hot Laps program. The first eventwill be the 2018 FORMULA 1 GULF AIR BAHRAIN GRAND PRIX, followed by nine other eventsat this year’s FIA Formula 1 World Championship, soon to be announced.

The Williams Mercedes FW41 will contest the Formula One World Championship in 2018.

Williams Martini Racing Launches The FW41

Williams Martini Racing has revealed a first look of its 2018 Formula One challenger, the Williams Mercedes FW41, at the team’s season launch in London this evening.


Cemb Expands U.S. Headquarters

Cemb-USA/BL Systems Inc. is expanding its Americas headquarters in Gainesville, Ga., with more warehouse, production and assembly space, a larger central call center, plus a new training center.

Franzoni has a Mazda scholarship toward the 2018 Indy Lights Presented by Cooper Tires season.

My Mazda Road to Indy: Victor Franzoni 

Victor Franzoni burst onto the Mazda Road to Indy Presented by Cooper Tires scene in 2014, winning his first-ever race in the Cooper Tires USF2000 Championship Powered by Mazda on the streets of St. Petersburg, Fla.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!