Bandag Acquired Majority Interest In Speedco

Bandag, Incorporated acquired an 87.5% majority interest in Speedco, Inc. from its founders and Shell Oil Products US. Bandag, a world leader in truck retread tires and tire management services, will operate Speedco as an independent business unit. Speedco’s three founding partners, who retain a 12.5% minority stake in the business, will continue in their current roles: Mark Clark will remain as President and Chief Executive Officer, Jeff Clark has been named Vice President, Finance and Administration – Treasurer, and Jim Dudley will serve as Vice President, Planning and Development. Speedco, headquartered in Cayuga, IN, provides quickservice truck lubrication nationwide through 26 company-owned and six licensed on-highway locations. In total Bandag paid approximately $56 million for its 87.5% interest and to retire $20.1 million of debt, which resulted in $0.9 million of interest expense in 2003. Speedco generated unaudited revenues of approximately $46 million and pretax income of approximately $4.8 million in 2003. Bandag expects earnings per share to improve between $0.10 and $0.15 in 2004 due to this acquisition.

In making the announcement, Bandag Chairman and Chief Executive Officer Martin G. Carver said: “Solidly profitable, Speedco has set the standard for consistently high quality, quickservice lubrication service in the commercial trucking industry, just as Bandag and its franchised locations in the U.S. and Canada have set the standard for tire management services. Speedco’s proven track record and strong management team move Bandag measurably closer to becoming a leading provider of vehicle services that make North America’s fleets more efficient.”

Speaking for the 11 year-old Speedco organization, President and Chief Executive Officer Mark Clark said: “Speedco’s history and Bandag’s track record for developing and delivering´innovative services to the commercial trucking industry give us a shared perspective and values that create a strong foundation for future growth. The cultural fit between the two organizations is a great match, and we are thrilled to join forces with Bandag and continue building Speedco’s market presence.” Speedco serviced its two millionth truck in September 2003 and opened its 32. location in mid-2002.

Discussing the strategic fit, Carver said: “Lubrication and tires are the trucking industry’s two most frequent preventive maintenance needs, and, given Bandag’s and Speedco’s respective leadership in their service sectors, the strategic fit is excellent. Speedco’s service reputation and nationwide on-highway presence create a solid platform for the expanded delivery of en-route maintenance services both now and in the years to come. Together, Bandag and Speedco create significant potential to improve the efficiency and costs of delivering vehicle services to the commercial trucking industry.”

Clark added that Speedco will continue to feature Shell Rotella® T Heavy Duty Motor Oil as well as other Shell lubricants used in their services. “Shell Rotella® T has been available at Speedco since we did our very first oil change, and we look forward to continuing to exceed the expectations of our mutual customers for many years to come,” Mark Clark said.