MEMPHIS, Tenn.—TBC Corp. has agreed to acquire Atlanta-based Carroll's Inc., its largest distributor, from founder and owner Bobby Carroll for an undisclosed amount. The deal is expected to close by Sept. 30, according to TBC Executive Vice President Ronald McCollough.
Carroll's Inc., which does business as Carroll Tire Co., serves more than 5,000 independent dealers through 15 distribution facilities in Georgia, Alabama, Florida and South Carolina. The company will keep its name and become a wholly owned subsidiary of TBC, according to TBC President and CEO Louis DiPasqua.
Carroll Tire generates annual sales of $150 million and accounted for 11 percent of TBC's net sales of $642.9 million in 1997. The firm is a privately owned wholesale distributor of tires and automotive accessories such as custom wheels, Mr. McCollough said.
TBC, one of North America's largest tire distributors and retailers, is purchasing the company because of Carroll Tire's strong distribution network within its four-state region, which TBC intends to expand, Mr. DiPasqua said.
``We're looking at protecting what's already in place and growing a system that has a tremendous reputation in the Southeast,'' he said. ``It's a very important piece of business already in our camp. We already have tremendous penetration in the Southeast through Carroll.''
Mr. DiPasqua declined to disclose where TBC will expand the operation, but said it will not necessarily be limited to the South.
``There will be some geographical expansion, which will be determined after the (deal's) closing,'' he said.
The acquisition also is part of TBC's long-term goal of buying companies that preserve the firm's size and leverage within the tire industry, according to Mr. DiPasqua. The firm, which owns Big O Tires Inc., wants to become a larger player in the replacement market.
``We have long said that our strategic vision is to protect our distributor base, our core business,'' he said. ``One of the things we must be cognizant of is that it's an industry that's consolidating rather quickly. We must be a consolidator in that industry and make opportunistic acquisitions at the retail and wholesale level if they are complementary to our base business.''
TBC's move into the Southeast closely follows Lincolnton, N.C.-based J.H. Heafner Co. Inc.'s purchase of tire distributor ITCO Logistics Corp. in April. Heafner gained a dominant position in the region with the acquisition of 30 distribution centers from ITCO.
ITCO previously had been one of TBC's customers, according to Mr. McCullough. TBC does plan to expand the Carroll Tire operation into territory ITCO had served for TBC prior to Heafner's buyout of ITCO, he said.
However, Mr. McCullough said TBC had negotiated with Carroll Tire for the past several months and would have acquired the firm regardless of the Heafner-ITCO deal.
TBC stands to gain about 150 employees from Carroll Tire, all of whom will stay after the purchase is completed, Mr. DiPasqua said.
TBC also will retain all of Carroll's product offerings, including non-TBC brands, he said.
``We're not looking to overhaul the program,'' Mr. DiPasqua said. ``They have 33 other brands important to customers in that part of the country, and it's our intention to continue to offer all of their products that the customers want.''
For his part, former owner Bobby Carroll, 72, said his decision to sell the business stemmed from a desire to get his estate in order. ``I might conk out at any time,'' he quipped.
Mr. Carroll said he will stay on for a time as a consultant. Bill Baker, Carroll Tire's chief operating officer, has been named its new president.
After the acquisition, TBC may introduce more distribution centers and plans to implement a sophisticated computer system for Carroll Tire, Mr. DiPasqua said. The new system will shorten delivery time and improve fill rates.
He declined to comment further on the system or on plans for more distribution centers.