Retail Service Wholesale Distribution

TBC enters into a definitive merger agreement to acquire Midas

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TBC Corp. and Midas Inc. have entered into a definitive merger agreement, pursuant to which TBC will acquire Midas through a cash tender offer at $11.50 per share.

The all-cash transaction is valued at approximately $310 million, including the assumption of approximately $137 million in debt and pension liabilities. (The tender offer for the outstanding shares of Midas has not yet commenced.)

The $11.50 per share offer price represents a 75% premium over Midas’ closing price of $6.58 on August 11, 2011, when Midas announced it would conduct a strategic review process, and a 28% premium over the closing share price as of Monday, March 12, 2012.

The proposed transaction has been unanimously approved by the board of directors of both companies. In addition, Midas Chairman, CEO and President Alan Feldman has signed a tender and voting agreement in support of the offer.

“With nearly 2,300 locations worldwide, Midas is a leader in automotive services and we are very excited to welcome such an iconic brand into our portfolio," says TBC Chairman and CEO Larry Day. "By combining the strengths of Midas’ platform with our industry expertise and financial resources, we will build on their current momentum and take the company to the next level.”

Feldman says the combination of these two "highly complementary businesses" will provide significant opportunities for Midas to prosper in the future, "and will create enhanced opportunities for franchisees and strong benefits to customers.”

Under the terms of the merger agreement, TBC will commence a cash tender offer no later than March 28, 2012. The closing of the transaction is expected to occur by the end of the second quarter, and is subject to customary terms and conditions, including regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

The merger agreement also provides for customary termination fees payable by Midas under certain circumstances and a provision under which Midas has agreed not to solicit any competing offers.

Morgan Joseph TriArtisan LLC is acting as financial advisor to TBC and Morgan Lewis & Bockius is acting as legal advisor. J.P. Morgan Securities LLC is acting as the financial advisor to Midas and Kirkland & Ellis LLP is acting as legal advisor.

TBC Corp. is a wholesale supplier to independent regional tire retailers and distributors throughout North America. Additionally, TBC’s wholesale group operates Carroll Tire, a regional tire wholesale distributor servicing independent tire dealers across the United States.

TBC’s Retail Group operates more than 1,200 franchised and company-owned tire and automotive service centers under the brands Tire Kingdom, Merchant’s Tire & Auto Centers, NTB (National Tire & Battery) and Big O Tires. TBC is owned by Sumitomo Corporation of America (SCOA), the largest subsidiary of Sumitomo Corp.

Midas offers brake, maintenance, exhaust, steering and suspension services plus tires at more than 2,250 franchised, licensed and company-owned Midas shops in 14 countries, including nearly 1,500 in the U.S. and Canada. Midas also owns the 161-store SpeeDee Oil Change business.

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