The past year has seen fundamental change in the ownership of the nation's leading wholesalers, with American Tire Distributors (ATD) Inc., TBC Corp., and Hercules Tire & Rubber Co. all being acquired by equity investor groups.
Despite the changes, ATD and Hercules have stayed their strategic courses, and Sumitomo Corp. of America (SCOA), the bidder for TBC, has pledged more of the same for that firm.
After being bought earlier this year by Bahrain-based global investment group Investcorp Bank BSC, Charlotte, N.C.-based wholesaler ATD continued its growth-by-acquisition strategy, buying Logan, Utah-based Wholesale Tire Distributors Inc. (WTD) this summer to add key distribution in the Rocky Mountain states. It also bought the inventory of Dallas Wheels and Accessories Inc. in Arlington, Texas.
ATD is on target to hit $1.5 billion in sales this year after reporting sales of $1.28 billion in 2004, according to company documents. Its 2004 acquisitions-Target Tire Corp. in North Carolina and Big State Tire Supply in Texas-are contributing about $100 million in additional sales, ATD said.
The WTD acquisition added about 2,700 customers in nine Rocky Mountain and Intermontane (mountain) states and bolsters ATD's status as an American Car Care Centers Inc. (ACCC) distributor. WTD was one of the original founding members of ACCC and services 50 ACCC outlets in the Rockies.
SCOA's pending acquisition of TBC (see story on page 9) will link it with private brand marketer and wholesaler Treadways Corp. under common ownership. TBC and East Norriton, Pa.-based Treadways will continue to be run as separate companies under their existing management with no changes anticipated in the short term, SCOA said.
Hercules' new majority owner, New York-based FdG Associates L.L.C., has stated it sees growth in Hercules' future by opening new distribution centers, by capitalizing on the strength of the company's private brands and possibly by acquisition.
Prior to the deal with FdG, Hercules streamlined its operations, selling its custom mixing business in April.
Management projects sales this year to reach $370 million to $375 million, up from last year's $350 million, which included about $10 million from the custom mixing business.
Other changes worth noting:
* Finland's Nokian Tyres P.L.C. bought University Wholesalers Inc. of Colchester, Vt., to strengthen its distribution capacity and logistics in the strategically important North American winter tire market. University Wholesalers, with distribution centers in Schenectedy, N.Y., and Colchester, is a Bridgestone/Firestone (BFS) Tire Starz distributor in Maine, New Hampshire and Vermont and a Nokian distributor for New England, New York and Pennsylvania. It generated $40 million in sales last year.
* Zisser Tire Wholesale improved its distribution capabilities earlier this year, buying a 135,000-sq.-ft., 24-dock warehouse in St. Louis, where it consolidated stock previously housed in three smaller facilities in the area. The new center houses 120,000 ultra-high performance tires Zisser has in stock, according to the company.
Zisser, which distributes the Wanli high-performance brand exclusively in the U.S., also leased distribution space in Philadelphia to serve East Coast customers and is looking to add a distribution point in Miami in the next three to four months and in Los Angeles thereafter.
Sales last year grew to $93 million on the strength of the performance tire sales, the company said.
* STC Tire and Exhaust, in Pella, Iowa, expanded its product portfolio earlier this year, taking on the Bridgestone/Firestone passenger and light truck tire flag brands.
Kevin Veenstra, executive vice president of sales, said adding the Bridgestone and Firestone brands allows STC Tire to offer customers a range of OE-quality products in order to stay competitive in the marketplace.
``There are a lot of vehicles with Bridgestone or Firestone as original equipment,'' he said. ``By taking on these lines, we can offer today's driver tires that match the factory equipment.''
Pella-based STC Tire has been in business more than 60 years, serving customers throughout the upper Midwest.