American Tire Distributors Holdings Inc. (ATD) has purchased Hercules Tire Holdings LLC, according to the Securities and Exchange Commission 8-K filing on Jan. 24. 2014. Hercules Tire Holdings owns 100% of the stock of the Hercules Tire & Rubber Co.
TDW (Tire Dealer’s Warehouse) is included in the deal. The tire wholesale distributor is a division of the Hercules Tire & Rubber, with 15 warehouses in California, Arizona, Texas, Illinois, Ohio, Florida, Oregon, Seattle and Colorado. Hercules also has six distribution centers in Canada and a 250,000-square-foot warehouse in northern China
As a result, Hercules Tire Holdings will become an indirect wholly-owned subsidiary of ATD, which paid $310 million for the company. Another $10 million in additional consideration is contingent upon the occurrence of "certain performance-related and other post-closing events."
The purchase price is expected to be funded by a combination of the following:
* issuance of additional debt,
* an equity contribution from ATD's indirect parent (TPG Capital LP), and
* borrowings under ATD's credit agreement.
The consummation of the acquisition, which is subject to customary closing conditions, is expected to occur by the end of January 2014.
“Hercules is a well-run company with an outstanding reputation in the industry,” says William “Bill” Berry, CEO and president of American Tire Distributors Inc. “Joining forces with the Hercules team is a very positive step for American Tire Distributors.”
