American Tire Distributors Inc. (ATD) announced that a fund managed by the Private Equity Group of Ares Management LP has agreed to acquire a significant stake in the company. The transaction will result in equal ownership between Ares and current majority shareholder TPG Capital LP (Tarrant Capital IP LLC).
Terms of the transaction were not announced and closing is subject to certain conditions.
“The company appreciates the guidance TPG has offered for the past five years, and we look forward to the added experience and expertise of Ares as we continue to expand as the premier tire distributor in North America.”
“This transaction is another significant milestone in ATD’s growth story, and we are proud now to have two very notable investors as our primary shareholders,” says Bill Berry, CEO and president of ATD. “The company appreciates the guidance TPG has offered for the past five years, and we look forward to the added experience and expertise of Ares as we continue to expand as the premier tire distributor in North America.”
David Kaplan, co-founder, senior partner, and co-head of Private Equity Group, says. “We are pleased to be able to partner with TPG to continue to grow ATD, a market leader with a demonstrated track record and significant expansion opportunities ahead. The company fits with Ares’ longstanding private equity strategy of acquiring strong franchises with proven management teams and helping them realize their full potential.”
Jonathan Coslet, chief investment officer at TPG, says, “We are pleased to offer our limited partners a significant return on their investment while allowing them to continue to participate in the growth of this best-in-class franchise.”
Bank of America Merrill Lynch, Goldman Sachs, and Deutsche Bank served as financial advisors and Ropes & Gray LLP served as legal counsel to ATD and TPG. Sullivan & Cromwell LLP served as legal counsel to Ares.
ATD is a subsidiary of American Tire Distributors Holdings Inc.
The same day ATD announced this agreement, the company made news for it's plan to offer $805 million in senior notes.
