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TriCan purchase could boost ATD sales 6%

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CHARLOTTE, N.C.—American Tire Distributors Holdings Inc.'s (ATD) purchase last year of Canadian wholesaler TriCan Tire Distributors will boost ATD's annual sales by $200 million or more, or about 6 percent, according to recently released Securities and Exchange Commission filings.

The filing shows unaudited pro forma condensed combined financial statements for ATD and Triwest Trading (Canada) Ltd.—which does business as TriCan Tire Distributors—for the nine months ended Sept. 29, 2012, as well as the audited financial statements for Triwest for fiscal years 2009-2011.

The documents also show that Triwest was a profitable company during the past four years, achieving net income/sales ratios of 4 and 4.5 percent for fiscal years 2010 and 2011, respectively, and 5.3 percent for the first nine months of fiscal 2012.

In fiscal years 2011 and 2010, Triwest booked annual sales of $181.8 million (Canadian) and $138.4 million, increases of 31.3 and 35.6 percent, respectively, vs. the year-earlier revenue. Through the first nine months of fiscal 2012, Triwest's sales were 12 percent ahead of the fiscal 2011 period.

ATD closed its deal for TriCan on Nov. 30, paying approximately $97.5 million for the Edmonton, Alberta-based wholesale business, which operates 15 warehouses across Canada.

In connection with the acquisition, ATD amended and restated its ABL Facility in order to provide for borrowings under the agreement by ATD Acquisition Co. V Inc., the entity created to effect the acquisition. This provision—called the “Canadian Tranche”—provides for revolving loans available only to Canada Acquisition in an aggregate amount equal to $60 million, subject to a Canadian borrowing base.
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