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ATD completes Hercules acquisition

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HUNTERSVILLE, N.C. (Feb. 6, 2014) — American Tire Distributors Holdings Inc. has completed its purchase of Hercules Tire & Rubber Co., paying $311.5 million for the Findlay, Ohio, tire distributor, importer and private brander.

ATD said the final purchase price may be as much as $10 million higher "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, ATD said in an 8K filing with the Securities and Exchange Commission.

The Huntersville-based company said it funded the acquisition from a number of sources, including the issuance of additional senior subordinated notes, an equity contribution of $50 million from ATD's indirect parent and borrowings under ATD's credit agreement.

The equity contribution was funded from proceeds of the sale by Accelerate Parent Corp. — ATD's indirect parent — of common stock to affiliates of TPG Capital L.P. and certain co-investors.

The sale of the senior subordinated notes — 11.5-percent interest, due 2018 — generated net proceeds of about $221.2 million, ATD said.

ATD carried out the purchase through ATD Merger Sub II L.L.C., an indirect wholly owned subsidiary, which acquired Hercules Tire Holdings L.L.C., a Delaware limited liability company that owns all of Hercules Tire & Rubber Co., the filing said.

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TB Reader Poll

Previous | Published January 28, 2016

Titan International and the United Steelworkers union have petitioned the U.S. International Trade Commission and U.S. Department of Commerce seeking relief from OTR tire imports from China, India and Sri Lanka. What’s your opinion?

I wholeheartedly support their action – something needs to be done.
46%
(36 votes)
I think it’s a bad idea that could inevitably tie the hands of domestic tire makers.
13%
(10 votes)
I oppose any duties against tire importers—they only raise costs for distributors and make it harder to obtain inventory.
24%
(19 votes)
I’m kind of on the fence and not sure what’s right, but need more information before deciding.
14%
(11 votes)
I don’t really care whether or not relief is granted.
3%
(2 votes)
Total votes: 78