MUSCATINE, Iowa (Feb. 17, 2004) — Bandag Inc. has bought an 87.5-percent interest in Speedco Inc., a quick-service truck lubrication business with 26 company-owned outlets and six licensed locations, for $56 million.
Muscatine-based Bandag acquired the share from the company's founders, who retain a 12.5-percent interest, and Shell Oil Products U.S.
Cayuga, Ind.-based Speedco generated unaudited revenues of about $46 million and pretax income of about $4.8 million in 2003, Bandag said. Bandag expects its earnings per share to improve between 10 cents and 15 cents in 2004 due to the acquisition. The $56 million acquisition price Bandag paid for its stake in Speedco included $20.1 million for the retirement of debt.
Bandag said it will operate Speedco as an independent business unit, with the company's founders continuing in their current roles. They include Mark Clark, president and CEO; Jeff Clark, vice president, finance and administration; and Jim Dudley, vice president, planning and development.
“Speedco's proven track record and strong management team move Bandag measurably closer to becoming a leading provider of vehicle services that make North America's fleets more efficient,” said Martin Carver, Bandag chairman and CEO.
Speedco, founded 11 years ago, will continue to feature Shell lubricants and oil in its services. The company, which serviced its 2 millionth truck in September 2003, opened its 32nd location in mid-2002, according to Bandag.