Retail Suppliers Wholesale Distribution

More on the purchase of AM-PAC, straight from ATD's executives

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"We know this is going to be a tremendous win for the tire dealers we deal with on a day-to-day basis."

So says Ron Sinclair, senior vice president of marketing for American Tire Distributors Inc. (ATD), about the company's purchase of AM-PAC Tire Distributors Inc.

ATD purchased 100% of AM-PAC's stock from Itochu Corp. earlier today, a deal that was one and one-half years in the making. (See "ATD acquires Am-Pac/Tire Pros.") The sale includes 24 distribution centers, the Tire Pros franchise program and 40 retail stores.

The distribution centers give ATD a strong foothold in new markets like St. Louis, Mo., and broader coverage for dealers in places like western Texas. It also gives them "depth and breadth of inventory," adds Sinclair.

Dick Johnson, chairman and CEO, is particularly excited about taking over Tire Pros. There are 294 Tire Pros franchise operations that span from California through the Sunbelt and as far east as Atlanta, Ga., and the panhandle of Florida.

Former AM-PAC Chief Operating Officer Dennis Mangola will stay on to run what ATD describes as a flexible, dealer-friendly program.

"I think the single biggest benefit (of this deal) is Tire Pros," says Johnson." I really like what Dennis has put together. He wrote the program, he developed it and he did a good job of expanding it.

"I want to expand it further," says Johnson. "Instead of (close to) 300 franchises, I would very much like to have 1,000."

Existing and future franchisees will have the opportunity to benefit from ServiceBAY ("ATD to dealers: 'ServiceBAY is at your service,' July 10, 2006) and ("American Tire Distributors creates," Nov. 23, 2008), part of ATD's stable of marketing programs. They also will have access to the Nitto NT850 Premium luxury touring tire, sold exclusively through ATD.

Prior to the purchase, ATD ran 78 distribution centers of its own. What about the overlap in distribution centers?

"Part of our plan is to look at everything and make those adjustments when we think we can serve the market in an effective way," says Bill Berry, ATD president and COO.

As for the retail stores, that decision, too, will have to wait until after the first of the year. According to Berry, about two-thirds of the stores are located in the St. Louis area.

"It's not our intention to compete with our dealers, and that hasn't changed," says Johnson.

With the tentative completion of next spring, and the decisions involved in melding AM-PAC with ATD, will ATD be looking to acquire more wholesale operations?

"I won't say they are over," says Johnson. "I'm working on another one as we speak. But we'll only do what we can do."

"Our plate is full with (AM-PAC) and," adds Berry.
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