ATD buys Hercules Tire

Major US-based replacement tyre wholesaler American Tire Distributors (ATD) has acquired Hercules Tire & Rubber for approximately US$310 million. Details of the purchase – described as a merger – were submitted to the United States Securities and Exchange Commission on 24 January.

According to the form signed by ATD executive vice-president and chief financial officer Jason T. Yaudes and lodged with the US Securities and Exchange Commission, ATD Merger Sub II LLC, an indirect wholly-owned subsidiary of American Tire Distributors Holdings, Inc., and American Tire Distributors, Inc., a direct wholly-owned subsidiary of American Tire Distributors Holdings, Inc., entered into an agreement with Hercules Tire Holdings LLC, a limited liability company that owns all the capital stock of The Hercules Tire & Rubber Company. ATD Merger Sub II LLC will be merged into Hercules Tire Holdings LLC, the latter then becoming an indirect wholly-owned subsidiary of American Tire Distributors Holdings, Inc.

Subject to closing conditions, the transaction is expected to be consummated by the end of January 2014. The $310 million purchase price may be supplemented by up to $10.0 million in additional consideration, contingent upon the occurrence of certain performance-related and other post-closing events.

ATD operates more than 100 distribution centres across the US. It recently expanded its operations in Canada with the acquisition of Kipling Tire’s wholesale business and now has 20 distribution centres there. The company serves approximately 70,000 customers across the US and Canada.