What ATD gets for $685 million
According to the 8-K form filed on Feb. 17, 2014, with the U.S. Securities and Exchange Commission, American Tire Distributors Holdings Inc. (ATD) will pay $345 million to purchase Alliance, Ohio-based Terry’s Tire Town, plus up to $20 million in “additional consideration contingent upon the occurrence of certain post-closing events.” (For the report, click here.)
The purchase price is expected to be funded by a combination of the issuance of additional debt and other resources, including the existing credit agreement, according to the filing. In connection with the purchase, ATD entered into a debt financing commitment letter with Bank of America N.A. and Merrill Lynch, Pierce, Fenner & Smith Inc. on Feb. 17, 2014. The lenders have committed to a $300 million senior secured term loan
In late January, ATD paid $310 million (plus up to $10 million for performance-related and other post-closing events) for Hercules Tire Holdings LLC.
That adds up to a maximum of $685 million ATD will spend for the two entities purchased in the first two months of the year. What is ATD getting for that?
* Hercules Tire & Rubber Co.
* TDW (Tire Dealer’s Warehouse), the tire wholesale division of Hercules, with 15 warehouses in California, Arizona, Texas, Illinois, Ohio, Florida, Oregon, Seattle and Colorado, six distribution centers in Canada and a 250,000-square-foot warehouse in China.
* Terry’s Tire Town’s 10 distribution centers and one commercial tire operation in the mid-Atlantic, Metro New York, New Jersey and New England area.
Bill Berry, CEO and president of ATD, notes that with the recent transactions, the company will be able to enhance the services and programs it is able to offer is customers. ATD operates 152 distribution centers in the U.S. and Canada.