TBC on NTB acquisition: 'This is not a fixer-upper'
TBC Corp.'s purchase of National Tire & Battery (NTB) "is definitely not a fixer-upper" scenario, says TBC President and CEO Larry Day. "The volume of these stores is outstanding... in fact, higher than (the volume of) average Tire Kingdom stores."
Earlier today, TBC announced that it had signed an agreement to acquire 226 NTB outlets that were put up for sale by Sears, Roebuck & Co. earlier this summer.
TBC President and CEO Larry Day says the Memphis, Tenn.-based private brand marketer has secured debt financing commitments from JP Morgan & Chase for the acquisition.
Due diligence on the deal is 90% complete, he says.
TBC will use Sears' current distribution system for the next six months and plans to add two new distribution centers to cover distribution functions after that point.
The acquisition gives TBC access to major markets in which it currently doesn't participate, including Dallas, Texas, and Chicago, Ill.
"We could add at least 20 stores to the Chicago market," says Day, "and other markets provide similar opportunities."
TBC also plans to sell private label tires through NTB, according to Day.
"My goal is to have private label sales represent a significant percentage of throughput -- the high teens to low 20s."
NTB only offers flag brand tires at the moment, including Michelin, BFGoodrich and Goodyear.
Day says the TBC stores will be fully integrated into the Tire Kingdom retail chain within six to eight months.
Regarding possible name changes, Day says "there's lots of value in the NTB name."