HUNTERSVILLE, N.C. (Jan. 29, 2014) — American Tire Distributors Holdings Inc. (ATD) has agreed to buy Hercules Tire & Rubber Co. for about $310 million, subject to certain customary pre-closing adjustments.
American Tire Distributors will effect the purchase through ATD Merger Sub II L.L.C., an indirect wholly owned subsidiary, the Huntersville-based wholesaler said in an 8K filing with the Securities and Exchange Commission.
The combination of ATD and Findlay, Ohio-based Hercules would create a mega-wholesaler with more than 150 warehouse distribution centers in the U.S. and in Canada.
ATD will report close to $3.5 billion in sales this year, and Hercules' annual sales are estimated to be in excess of $500 million.
ATD said it expects the deal to close this week.
In its filing, ATD said the final purchase price could be up to $10 million higher, based on "additional consideration contingent upon the occurrence of certain performance-related and other post-closing events. The closing purchase price also is subject to certain post-closing adjustments, including, but not limited to, working capital adjustments.
"Hercules is a well-run company with an outstanding reputation in the industry," said ATD President and CEO William Berry. "Joining forces with the Hercules team is a very positive step for American Tire Distributors."
In its third quarter 10Q filing with the SEC, ATD estimated its share of the U.S. and Canadian replacement passenger and light truck tire markets at approximately 10 and 9 percent, respectively.
Hercules was founded in 1952 as a cooperative by a group of independent tire dealers. It has been owned since 2005 by FdG Associates L.P., a New York City-based private equity firm.
Hercules operates four divisions: Hercules Tire USA; Hercules Tire Canada; Tire Dealer's Warehouse (TDW); and Hercules Tire International (which it calls the largest independent tire exporter in North America, with the Hercules and Ironman brands).
Besides the DCs in North America, Hercules operates a 250,000-sq.ft. warehouse in northern China.
In terms sales and revenue, how is your business shaping up in 2016 vs. 2015?
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