NEW YORK (May 11, 2005) — The senior management team of private brand tire marketer Hercules Tire & Rubber Co. has partnered with FdG Associates, a middle-market private equity firm, to acquire Findlay, Ohio-based Hercules.
FdG, which operates from its base in New York City, said the transaction was financed with equity from FdG's second institutional fund, FdG Capital Partners II L.P. It will provide Hercules with the capital to further expand its Hercules-branded private label program, solidify its industry position and capitalize on opportunities for continued growth and acquisitions, FdG said.
The financial terms of the deal were not disclosed.
In a prepared statement, Hercules CEO Craig Anderson called the transaction “a fantastic opportunity for Hercules” as well as “a logical next step in the growth of our company. Our partnership with FdG will provide Hercules the additional resources needed to allow us to further develop our product offering and distribution platforms worldwide, and strengthen our financial base.”
The deal also will allow Hercules “to capitalize on growth and acquisition opportunities within the large and highly fragmented tire distribution industry, which is projected to continue to expand at a strong pace,” he continued.
Mr. Anderson stressed that “the strong relationships Hercules has developed with its worldwide customers and suppliers will remain unchanged. We will continue to focus on the private-label, nationally known independent tire brands and niche performance products for which our customers rely on us.”
Private brand dealer agreements covering the company's Hercules and Merit private labels will be honored and will remain in place, “and additional dealers are being sought in open territories,” he added.
Hercules markets and distributes its Hercules, Merit, Electra and Superior private brands to retailers and wholesalers across the U.S. and Canada and to customers in 75 countries around the world. The company said it focuses on the “fastest growing sectors” of the tire market: nationally known independent tire brands, niche products, performance tires and medium radial truck tires.
FdG Managing Director Mark S. Hauser said his firm is “pleased to partner with Hercules' management to acquire the business. This is consistent with our philosophy of partnering with strong management teams to execute their strategic plans. We look forward to working with management to solidify Hercules' leadership position in the tire industry and create additional opportunities for growth.”
Founded in 1952 by a group of New England retreaders, Hercules operates 12 distribution centers—with a total of 1.3 million square feet—in the U.S., Canada and China. Inventories are maintained at more than 2 million units, the company said.
Hercules sold its tread rubber manufacturing business in 2001 to its Findlay neighbor, Cooper Tire & Rubber Co., and recently sold its Findlay custom mix operation to Toronto-based Biltrite Industries, allowing the company to concentrate its investment and energies in its core tire distribution business.
Hercules' Canadian Tire Division has its headquarters in Mississauga, Ontario; its International Division is located in Kitchener, Ontario; and its Asia Division is in Guangzhou, China.