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September 13, 2004 02:00 AM

ATD buys Target Tire

Bruce Davis
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    American Tire Distributors Inc. (ATD) has bought Target Tire Co. of Jacksonville, N.C., expanding its network of warehouses by acquisition for the second time this year-this time by 11 to 80.

    Terms of the deal, which closed Sept. 3, were not disclosed. The purchase comes just nine weeks after ATD closed a deal to buy Big State Tire Supply, a Lubbock, Texas-based wholesaler with nine warehouses in Texas, Oklahoma and New Mexico.

    Target Tire's Buffalo Tire & Car Care retail business is not part of the deal, according to ATD Chairman and CEO Dick Johnson, who emphasized ATD's commitment to its independent tire dealer customers to stay out of the retail end of the business.

    Target Tire's 11 warehouses are in Georgia, North and South Carolina, Tennessee and Virginia-states where ATD already operates 26 distribution centers. Mr. Johnson acknowledged there is some overlap between the two companies but said Target Tire's network also fills some gaps in ATD's reach.

    The 11 distribution centers service approximately 1,800 customers across the five states, as well as portions of Kentucky and West Virginia.

    ``This was an opportunity to add to our management strength,'' Mr. Johnson told Tire Business, lauding Target Tire owners Leonard ``Bucky'' Stein and his son Howard and their management team. Mr. Johnson said he and the Steins have been friends for a long time, a relationship that helped accelerate the pace of negotiations.

    ``Bucky and Howard always said when they decided it was time to sell the business, they'd do it only to someone who would provide the best service for their customers,'' Mr. Johnson said.

    The Steins, who declined comment on the deal, will stay on with ATD for a short time during the transition, Mr. Johnson said.

    In business since the early 1960s-Bucky Stein started by acquiring Avalon Tire in South Carolina-Target Tire reports annual sales of more than $100 million.

    Prior to the sale to ATD, Target Tire was affiliated with American Car Care Centers Inc. (ACCC), Michelin Americas Small Tires, Bridgestone/Firestone's TireStarz and Continental Tire North America Inc.'s Conti-Gold program. It also distributes Cooper tires.

    ACCC said it has re-assigned its dealers in Target Tire's area on an interim basis to two other existing ACCC distributors: Terry's Tire Town will supply dealers in Virginia and North Carolina from its Baltimore warehouse, and Ampac Tire Distributors will take over distribution to ACCC dealers in Georgia and South Carolina from its Birmingham, Ala., warehouse.

    ACCC executives stressed this is an interim solution and that they already are evaluating candidates to take over Target Tire's distribution area. They also said they hope to retain all 123 dealers there.

    It's too soon to determine whether ATD will continue Target Tire's affiliation with the other distribution programs, the company said, although ATD already is a TireStarz distributor in other areas and just recently began handling the Continental and General brands.

    Jacksonville, N.C.-based Buffalo Tire remains the property for now of the Steins. Target Tire sold four Buffalo Tire outlets last year and earlier this year to Briggs & Sons Tire of Fayetteville, N.C. Buffalo Tire now operates three outlets in Jacksonville and three in the Charlotte metro area.

    The Target and Big State acquisitions will add more than $100 million to ATD's annual sales, which were on target to exceed $1.2 billion this year prior to these deals.

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