CLEVELAND — Dealer Tire L.L.C. intends to offer $350 million in senior notes, due 2028, to finance the previously announced acquisition of Dent Wizard International Corp., a national provider of automotive reconditioning services and vehicle protection products.
The notes and related guarantees are being offered only to persons "reasonably believed" to be "qualified institutional buyers," as that term is defined under Rule 144A of the Securities Act, Cleveland-based Dealer Tire said, without stating when it expects to start the offer or the return details.
Backed by majority shareholder Bain Capital L.L.C., Dealer Tire — whose main business is distributing tires and wheels to car dealerships — disclosed Jan. 6 its intention to buy Dent Wizard from Gridiron Capital L.L.C. in a move to augment the range of aftersales services it offers.
Dealer Tire said it intends to use the net proceeds from the proposed offering, together with cash on hand, certain cash equity and the proceeds of the borrowing under new senior secured credit facilities to finance the acquisition of DWH Holdings Inc. (the parent company of Dent Wizard International Corp,); finance the repayment of substantially all of Dent Wizard's existing indebtedness and a portion of the company's outstanding indebtedness under its revolving credit facility; pay transaction expenses and fees incurred in connection with the foregoing; and to the extent of any remaining proceeds, for working capital and other general corporate purposes.
The notes will not be registered under the Securities Act of 1933, any state securities laws or the securities laws of any other jurisdiction, Dealer Tire said, and may not be offered or sold in the U.S. or for the benefit of U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to the registration requirements of the Securities Act and applicable state securities or "blue sky" laws.
Dealer Tire — founded in 1999 by the then owners of the former Mueller Tire & Brake — manages replacement tire and parts programs representing more than 20 automotive OEM brands in the U.S. It serves more than 8,000 automotive dealerships from over 40 distribution centers across North America, generating sales of over $1 billion annually.
St. Louis-based Dent Wizard considers itself North America's largest provider of automotive reconditioning services and vehicle protection products, such as paintless dent repair, minor wheel and paint refinishing, interior repair and key replacement, in-transit repair, hail and catastrophe services and related F&I products.