Equity firm makes investment in Hercules

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New York, New York-based private equity firm FdG Associates is investing in Hercules Tire & Rubber Co.

"It is not an acquisition," a spokesperson for FdG told earlier today.

"It's a change in the company's capital structure."

In a recent statement, FdG officials said that the companies have "entered into an agreement ... to recapitalize (Hercules') business in partnership with management.

"This transaction will allow Hercules to strengthen its financial base, further develop its private label program, solidify its position in the distribution of private label and branded tires, and capitalize on growth opportunities.

"Hercules' relationship with its customer and suppliers will remain unchanged."

Hercules is the third largest private brand marketer in the United States, according to Modern Tire Dealer data.

Its Hercules, Merit and Signet private brands comprise a combined 2.5% of the domestic replacement passenger tire market.

The Hercules brand alone makes up 2% of said market and 1% of the U.S. replacement light truck tire market. Hercules also enjoys 1.5% of the domestic medium/heavy truck tire market.

Hercules has distribution centers in Findlay, Ohio; Compton, Calif.; and Houston, Texas.

It also boasts several divisions, including distribution arms TDW (Tire Dealer's Warehouse) and Tire Specialists, plus Treadway Exports and an Asian Pacific unit.

A spokesperson for FdG Associates told that more details will be available after the transaction closes.

Closing is expected to take place within the "next couple of weeks," she says.

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