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ATD continues to expand in Canada

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TriCan Tire Distributors Inc., a wholly owned subsidiary of American Tire Distributors Holdings Inc. (ATD), has entered into an agreement to purchase all outstanding shares of Regional Tire Distributors Inc. (RTD).

The closing of the transaction, which is subject to customary conditions, is expected to occur by the end of April 2013 for aggregate cash consideration of approximately $62.5 million. The purchase price, subject to certain post-closing adjustments, is expected to be funded by borrowings under ATD's Sixth Amended and Restated Credit Agreement.

(On March 21, 2013, American Tire Distributors Holdings entered into an amendment to the Credit Facility to facilitate the acquisition.)

The acquisition will significantly expand ATD’s presence in the Ontario and Atlantic Provinces of Canada, according to the company, which purchased TriCan last November (see "ATD gets a foot in Canada's door").

RTD has grown from two distribution centers in 2008 to nine. It operates five distribution centers in Ontario and four in the Atlantic Provinces. The Burlington, Ontario-based company services approximately 3,100 customers.

“RTD Ontario has built a very strong presence in the eastern provinces in which they operate,” says William “Bill” Berry, CEO and president of ATD. “These nine distribution centers will complement the current TriCan operation, which has a leading market position across the Prairie Provinces and in British Columbia.” 

Following the close of the acquisition, ATD will continue to run its Canadian operation as a stand-alone business unit. RTD President Mike Kustra will assume the role of president over the combined RTD/TriCan operation. Chris Fletcher, president of TriCan Tire Distributors, will assume the role of non-executive chairman of the combined operation.

ATD and its subsidiaries plan to begin expanding their Canadian distribution centers in 2013 "to support a broader product screen offering to customers." They also plan to add several new distribution centers across Canada by opening greenfield locations "and potentially acquiring other Canadian distributors."

ATD operates 123 distribution centers, including 15 distribution centers in Canada. The DC's service approximately 70,000 customers across the United States and Canada.

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