Analyst comments on ATD acquisition
Industry analyst Nick Mitchell, senior vice president, research, for Northcoast Reseach in Cleveland, Ohio, and author of Modern Tire Dealer’s Your Marketplace column, says the purchase of Alliance, Ohio- based Terry’s Tire Town by American Tire Distributors (ATD) makes sense (see "ATD to purchase Terry's Tire Town").
“There are a lot of synergies – in products offered, their purchasing scale, inventory management, eventually their routing of trucks,” says Mitchell.
“ATD is a leader in terms of making key acquisitions. It shows how aggressive they are.” He believes the company is not done yet. “I expect Bill Berry, ATD’s CEO and president, to continue to make acquisitions going forward as long as the economics of the transactions remain favorable.”
“This goes back to the statements I made in my interview in the January issue of MTD concerning the consolidation of companies on the retail and wholesale sides (see “Tire dealer watch list for 2014.”).
With such consolidations, "It's getting harder and harder for the little guys to compete against the big guys."