TBC Corp. has acquired Manassas, Va.-based Merchant's Inc., the sixth largest tire dealership in North America with 112 stores.
TBC will pay $57.5 million cash within 30 days of the deal's expected April 1, 2003, closing date and up to $15 million in future years based on the performance of acquired Merchant's outlets.
The Manassas, Va.-based Merchant's has locations in its home state, Maryland, North Carolina, South Carolina, Pennsylvania and Washington D.C.
TBC's purchase of the chain "enables us to grow our retail platform in new and existing markets while realizing substantially greater purchasing leverage and distribution economies," says TBC President and CEO Larry Day.
The buy-out also "expands our retail presence contiguously into Virginia (57 locations) and Maryland (23 locations)."
TBC's total retail operations at press time also include 228 Tire Kingdom Inc. stores and 543 franchised Big O Tires Inc. outlets.
In addition, the Memphis, Tenn.-based private brand tire marketer also is entering into new financing agreements with its lenders in order to fund future acquisitions, according to TBC officials.
As part of the new financing, JP Morgan will provide $208 million in a senior credit facility that will replace a previous facility of $143 million; the new, five-year arrangement will include a revolving credit facility of up to $121 million and term loans of up to $87 million.
The Prudential Capital Group also is providing an additional $50 million of long-term capital.
Earlier this year, Day told mtdealer.com that TBC is examining other dealerships for potential acquisition, though he declined to identify specific companies.
