CLEVELANDDealer Tire L.L.C., a Cleveland-based tire distributor that focuses on supplying tires to OEMs and auto dealerships nationwide, said it has received a significant financial investment from New York private investment firm Lindsay Goldberg L.L.C.
In turn, Dealer Tire said, it will use a portion of the Lindsay Goldberg investment to buy out the interest of TA Associates, a Boston private equity firm that made a minority investment in Dealer Tire in 2009.
Financial details of the Lindsay Goldberg investment were not disclosed. The deal is expected to close next month, Dealer Tire said in a news release.
A Dealer Tire spokesman said the investment will usher in a new period of growth with a strong partner. He declined to disclose Dealer Tire's annual sales or its number of employees.
Lindsay Goldberg specializes in maintaining long-term investments in family-owned businesses and collaborating with management teams to achieve long-term growth, according to the Dealer Tire news release.
According to its website, Lindsay Goldberg is a venture capital and private equity firm founded in 2002.
In a joint statement, Scott Mueller, CEO of Dealer Tire, and Dean Mueller, the company's president, said they thank TA Associates for their support over the past five years and welcome our new partners at Lindsay Goldberg.
Our company prides itself on our innovative approach and accomplishment-driven culture.
Lindsay Goldberg's successful track record, prudent financial philosophy and long-term investment approach are uniquely aligned with Dealer Tire's goals and aspirations, the Muellers continued. We are excited to join in this partnershipone that we are confident will benefit all of our stakeholders.
Michael Dees, partner at Lindsay Goldberg, said in a statement that franchised auto dealers have become increasingly focused on customer retention within their service departments, and replacement tires and light maintenance parts are a major defection point away from dealers. Dealer Tire provides dealers with the tools necessary to offer their customers better service in a profitable manner.
Mr. Dees added that Lindsay Goldberg is equally enthusiastic about the opportunity to partner with Dealer Tire and its employees to drive future growth and support the company's unique culture of innovation.
Dealer Tire was founded in 1999 by the Mueller family, former owners of the longtime Cleveland-based Mueller Tire & Brake retail chain. Through 42 distribution centers, Dealer Tire manages replacement tire and parts programs for 23 automotive OEMs in the U.S. and eight in Canada, serving more than 10,000 auto dealerships.
Recently, RightTurn.com, a tire dealer network that's part of Dealer Tire, launched a new ad campaign aimed at bringing in more consumer tire sales.
Adweek magazine reported that RightTurn.com is increasing its media spending and has hired a new lead agency, Cramer-Krasselt in Chicago. It cited sources in reporting that annual media spending, which in the past has totaled less than $1 million, is expected to rise to $25 million next year.
Cramer-Krasselt's assignment encompasses not only making ads but also planning and buying media for Right-Turn.com, Adweek reported. The Chicago firm also will handle public relations and analytics efforts, according to the story.
The new agency succeeds Cleveland-based ad agency Brokaw Inc.
RightTurn.com helps consumers to find all types of tiresbased on their vehicle types, how much they drive and other factorsand a local dealer that can install them, Adweek said. You pay for the tires and installation up front, and then RightTurn.com ships them to the dealer for installation.
The first big campaign by Cramer-Krasselt is expected in the spring, according to the magazine.
In a story last year in Tire Business, Dealer Tire described RightTurn.com as being different from other online tire-buying sites because it is directed more at the average tire buyerone who's not particularly tire savvy.
The price quoted online is the final, all-inclusive price, the company stressed, including: mounting, balancing, valve stem, disposal and tire pressure monitoring system (TPMS) reset fees as well as road-hazard protection.
This story appeared in Crain's Cleveland Business magazine, a sister publication of Tire Business.