American Tire Distributors Holdings Inc. (ATD) has purchased Hercules Tire Holdings LLC, according to the Securities and Exchange Commission 8-K filing on Jan. 24. 2014. Hercules Tire Holdings owns 100% of the stock of the Hercules Tire & Rubber Co.
TDW (Tire Dealer’s Warehouse) is included in the deal. The tire wholesale distributor is a division of the Hercules Tire & Rubber, with 15 warehouses in California, Arizona, Texas, Illinois, Ohio, Florida, Oregon, Seattle and Colorado. Hercules also has six distribution centers in Canada and a 250,000-square-foot warehouse in northern China
As a result, Hercules Tire Holdings will become an indirect wholly-owned subsidiary of ATD, which paid $310 million for the company. Another $10 million in additional consideration is contingent upon the occurrence of "certain performance-related and other post-closing events."
The purchase price is expected to be funded by a combination of the following:
* issuance of additional debt,
* an equity contribution from ATD's indirect parent (TPG Capital LP), and
* borrowings under ATD's credit agreement.
The consummation of the acquisition, which is subject to customary closing conditions, is expected to occur by the end of January 2014.
“Hercules is a well-run company with an outstanding reputation in the industry,” says William “Bill” Berry, CEO and president of American Tire Distributors Inc. “Joining forces with the Hercules team is a very positive step for American Tire Distributors.”
Bob Ulrich was named Modern Tire Dealer editor in August 2000. He joined the magazine in 1985 as assistant editor, and has been responsible for gathering statistical information for MTD's "Facts Issue" since 1993.