CHARLOTTE, N.C. (April 21, 2010) — Affiliates of TPG Capital, a private investment firm whose holdings include Burger King Corp. and Neiman Marcus Group, have agreed to buy American Tire Distributors Holdings Inc. (ATD) for about $1.3 billion.
The deal, expected to close before mid-year, means ATD will suspend its planned public offering of stock. TPG will buy ATD from its current owners, affiliates of Investcorp Bank BSC, Berkshire Partners L.L.C. and Greenbriar Equity Group L.L.C.
Bahrain-based global investment group Investcorp Bank acquired ATD in March 2005 for approximately $500 million. Prior to that Boston-based Charlesbank Capital Partners L.L.C. owned more than 90 percent of ATD.
“American Tire Distributors is a market leader that has demonstrated its ability to perform well over an extended period of time,” said Kevin Burns, a partner at TPG, in a prepared statement. “We're investing behind a great management team, and we look forward to working with them to continue to expand this successful franchise.”
The transaction has fully committed financing, ATD said, consisting of a combination of equity to be invested by TPG Capital and debt financing to be provided by certain affiliates of Bank of America, Barclays Capital, General Electric Capital Corp., RBC Capital Markets, UBS and Wells Fargo Capital Finance, part of Wells Fargo & Co.
“This is an exciting time in the evolution of our company” said ATD President and CEO William Berry. “We welcome our new partners at TPG, who share the same vision we do for the continued growth of the American Tire Distributors brand as significant growth opportunities remain, and we continue to seize opportunities such as geographic expansion and online sales.”
David Tayeh, a managing director at Investcorp, said, “Over the past five years management implemented a successful strategy that has built American Tire Distributors into the leading replacement tire distributor in the U.S. We are proud to have partnered with management in the development of the strategy and believe TPG is the ideal new partner for the company to support it through the next stage of its development and growth.”
TPG Capital is the global buyout group of Fort Worth, Texas-based TPG (formerly Texas Pacific Group), a private investment firm founded in 1992 with more than $48 billion of assets under management and offices around the globe.
Charlotte-based ATD operates 83 distribution centers serving 37 states. Fiscal 2009 sales were $2.17 billion. ATD had planned to sell shares in the company to help it repay debt.