Charlesbank sells interest in American Tire Distributors

Feb. 8, 2005

The majority owner of American Tire Distributors Inc. (ATD) has sold the Huntersville, N.C.-based distribution group to Investcorp, a global investment group.

Although the contract between ATD's owner, Charlesbank Capital Partners LLC, and Investcorp. has been signed, there are a number of details that still need to be worked out, according to Dick Johnson, ATD chairman and CEO. Johnson told that he will stay on after the transaction is completed, which is expected to be late March.

Charlesbank, a private equity firm making middle-market investments in domestic companies, purchased controlling interest in ATD in May 1999.

ATD is the eighth largest independent tire dealership in North America with close to 80 locations, according to Modern Tire Dealer's "2004 Top 100 Independent Tire Store Chains" list. It supplies more than 40,000 customers with tires, wheels, accessories and automotive service equipment on a daily basis.

In a press release, Johnson said to expect business as usual at ATD.

"We thank Charlesbank for the support they have provided the company, and welcome Investcorp as our new partner," he said. "This transaction changes nothing in ATD's strategic direction -- the growth of our dealers' businesses remains central to our success and growth.

"We aim to continue to improve our capabilities in distribution and customer service to achieve this basic strategic goal, and look forward to benefiting from Investcorp’s deep experience along the way."

ATD aggressively expanded in 2004 by acquiring the following:

* the inventory of Dallas Wheels & Accessories Inc., an Arlington, Texas-based custom wheel and accessories retailer, in December.

* 11 distribution centers from long-time American Car Care Centers member Target Tire in September. ATD joined ACCC later in the month and assumed control of most of Target Tire Inc.'s former ACCC territory.

* Texas Market Tire Inc., dba Big State Tire Supply, in July. The acquisition expanded ATD's service across Texas, Oklahoma and New Mexico.

"American Tire Distributors holds a strong position in a fragmented, but growing replacement tire distribution market," said Steven Puccinelli, a managing director of Investcorp. "We look forward to partnering with Dick Johnson and his team to capture the growth opportunities that are available to the company and, just as importantly, to help its independent tire dealer customers grow their businesses."

Investcorp is a global investment group with offices in New York, London and Bahrain. (a representative at the New York office passed www.moderntiredealer's inquiries about the purchase to the main headquarters in London, which was closed at press time). The firm has four lines of business: corporate investment, real estate investment, asset management and technology investment.

The firm manages total investments in alternative assets of approximately $8.6 billion. In the United States, Investcorp and its clients own corporate investments that include Associated Materials, Thomson Media, Aero Products International, PlayPower and EnviroSolutions.

In Europe, Investcorp and its clients own corporate investments that include APCOA AG, Hilding Anders, Minimax and Helly Hansen.

For further information on Investcorp., visit its Web site at