TBC Corp to acquire Midas for $310M

US-based company TBC Corporation, which calls itself the country’s largest marketer of tyres for the automotive replacement market, has acquired automotive service provider Midas for approximately US$310 million. The all-cash transaction will see Midas shares change hands for $11.50 each, a price that represents a 75 per cent premium over Midas’ closing price of $6.58 on 11 August 2011, when Midas announced it would conduct a strategic review process, and a 28 per cent premium over the closing share price as of 12 March 2012. The proposed transaction has been unanimously approved by both companies’ boards of directors. In addition, Midas chairman, president and CEO 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,” commented TBC chairman and CEO Lawrence 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.”

“We are pleased to announce this transaction, which is strategically compelling and provides significant value to our shareholders,” added Alan Feldman. “The offer represents a significant and immediate premium for our shareholders and marks the culmination of a thorough strategic review process by our board of directors, which began last August. 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 28 March 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.

Midas is one of the world’s largest providers of automotive service, including brake, maintenance, tyres, steering, suspension, and exhaust services. More than 1,500 franchised and company-owned Midas locations operate in the United States and Canada, plus 800 licensed and franchised stores in the following 13 countries: Australia, Austria, Belgium, the Bahamas, Costa Rica, France, Honduras, Italy, Mexico, Morocco, New Zealand, Poland, Portugal, and Spain.

TBC-owned retail operations include the company operated Tire Kingdom, Merchant’s Tire & Auto Centers, and National Tire & Battery tyre and automotive service centres plus the Big O Tires network of franchised stores. Through its 38 Carroll Tire wholesale distribution centers, TBC Corporation also markets directly to independent tyre dealers across the US, and the markets and sells nine proprietary tyre brands through North America. These are Multi-Mile, Cordovan, Sigma, Vanderbilt, Sumitomo, Eldorado, Laramie, Telstar, and Jetzon; these brands are distributed through TBC Private Brands and Treadways to independent retailers and wholesalers in the US, Canada, and Mexico. TBC Corporation has been owned by Sumitomo Corporation of America since 2005; this largest subsidiary of Japan’s Sumitomo Corporation is, incidentally, not associated with the Sumitomo tyre brand.