CHARLOTTE, N.C.American Tire Distributors Holdings Inc., through its TriCan Tire Distributors Inc. subsidiary in Canada, has agreed to buy the wholesale distribution business of four western Canadian dealershipsKirk's Tire Ltd., Regional Tire Distributors Inc. of Calgary and Edmonton and Trail Tire Distributors Ltd.
The combined purchase price is nearly $155 million, ATD said in two 8K filings with the Securities and Exchange Commission on July 2 and 3.
The company did not disclose the anticipated sales revenue of the companies it's buying.
The deals individually are:
c $73 million for the wholesale business of Kirk's Tire Ltd. of Edmonton, Alberta. Kirk's Tire's retail operations were not acquired and will continue to operate under its current ownership, ATD said.
c $31.9 million for Regional Tire Distributors (Edmonton) Inc. of Edmonton, Alberta.
c $20.7 million for Regional Tire Distributors (Calgary) Inc. of Calgary, Alberta.
c $27.3 million for Trail Tire Distributors Ltd. and its Extreme Wheel Distributors Ltd. affiliated business, both of Edmonton.
The acquisitions are being funded through borrowings under Tri Can's existing ABL credit facility, ATD said, and are all subject to certain post-closing adjustments, including, but not limited to, working capital adjustments.
Regional Tire Distributors of Edmonton and Calgary are not to be confused with Regional Tire Distributors Inc. of Burlington, Ontario, which ATD acquired in May 2013. That acquisition, for about $62.5 million, gave ATD five distribution centers in Ontario and four in the Atlantic Provinces.
The businesses do overlap, however.
Trail Tire was founded more than 40 years ago. Today it services dealers throughout western Canada from its 100,000-sq.-ft. warehouse in Edmonton, according to its website. Among the sub-dealer programs it handles are Bridgestone TireStarz, Cooper Medallion and Yokohama Synergy.
While Trail Tire and Kirk's Tire were involved with both the Integra Tire and Tirecraft retail marketing groups as suppliers, the deals with ATD are not expected to have any material effect on those groups' day to day operations, the heads of both Integra Tire and Tirecraft said.
In Tirecraft's case, it'll be pretty much business as usual, according to Corey Miller, president of the Tirecraft Group.
This actually strengthens our business quite a bit, Mr. Miller said. We've been dealing with ATD since last year when they bought RTD in Ontario, so we see this as an extension of that relationship. It will provide more homogenous distribution coast to coast.
All of Kirk's Tire's retail stores are part of the Tirecraft network, but it's not known how many retail stores Kirk's Tire controls individually; the Tirecraft network owners don't disclose their individual store holdings.
Integra President and CEO David Cosco said these deals won't affect Integra's structure because Integra's reincorporation last year involved the owners of those businessesBrad Kirk of Kirk's Tire of Lethbridge, Alberta, and Allen Ambrosie of Trail Tire Distributors Ltd.who joined him as partners.
Mr. Cosco owns 50 percent of the reincorporated Integra Tire, while Messrs. Kirk and Ambrosie share the other 50 percent, according to Integra. Financial terms were not disclosed.