DURAND, Wis.—Bauer Built Inc. has strengthened its hold on the Midwest by acquiring one of its competitors, Fulton, Ill.-based U.S. Wholesale Tire Inc.
Terms of the March 26 purchase were not disclosed. The deal gives Durand-based Bauer Built an enlarged customer base in Iowa, Nebraska, Illinois, Kansas, Minnesota and South Dakota, and a wholesale location in Fulton. Much of U.S. Wholesale Tire's distribution area is the same as Bauer Built's, but that only will help give Bauer Built a commanding presence within its market, said President Jerry Bauer.
Mr. Bauer said his company will immediately begin to absorb U.S. Wholesale Tire's business, inventory and 20 employees into its existing distribution centers, which are nearer to both companies customers. A transition team is already in place in Fulton to see the transfer through to Bauer Built.
Eventually, Bauer Built will close the Fulton office because of its proximity to Bauer Built's commercial tire center and warehouse in Davenport, Iowa.
Everyone could see the buyout coming, he said. "We shared a lot of the same customers in the marketplace. The geographical territories virtually all overlapped.
"Sometimes in an acquisition you try to minimize disruption by just continuing as is. But it wouldn't have had any bearing here because everybody knew what was going on."
U.S. Wholesale Tire, which posted more than $12 million in sales in 2000, was a key distributor for Michelin and BFGoodrich agricultural tires. Exclusively a wholesaler, the company sold a mix of passenger, light truck, truck, industrial, ag tires and tubes, according to Mr. Bauer.
U.S. Wholesale Tire's largest market was Iowa, where it had the distribution zrights to Michelin and BFGoodrich farm products. Bauer Built—a Michelin distributor, new-tire dealer and retreader—now gains marketing rights to Iowa and eastern Nebraska. Bauer Built already operates nine locations in Iowa and holds marketing rights to Michelin and BFGoodrich ag tires in neighboring states, Mr. Bauer said. The company also distributes Firestone and Titan farm tires.
Bauer Built posted $129 million in sales in 2000. It is North America's seventh largest commercial tire dealership and the 14th largest retreader, according to Tire Business' rankings. Mr. Bauer said the company is now offering retreading services to U.S. Wholesale Tire's customers.
The two companies have been negotiating the deal since January. U.S. Wholesale Tire's principals—Denny Meier, Darwin Meier, Bob Hadesbeck, Mike Yurkowski and Paul Zurcher—all sold controlling interest to Mr. Bauer and will not join the company.
However, one of U.S. Wholesale Tire's former principals and founders—Chris Owens, who left the company while president in 1999—has worked as manager for Bauer Built's Mason City, Iowa, center since Jan. 2. Mr. Bauer said Mr. Owens did not know about the acquisition until after it closed.
In keeping with its plans to grow both internally and externally, Bauer Built also will relocate its 7,500-sq.-ft. Davenport facility to a 23,000-sq.-ft. building by June 30, according to Mr. Bauer, who said the larger location should help the company increase its business.
The firm also is moving into the Chicago market later this year and will open a combination commercial/retread/wholesale center.
The company wants to add people and expand its facilities to dominate its market, Mr. Bauer said.
"We're not a company that's looking to jump outside our geographical territory.... If something came up in Florida, Colorado or California, we're not one of those guys that are national players. If it's bordering where we're at today, we'll look at it or if it's within the geographical area where we're at, we'll look at it."