COMMERCE, Calif.—International tire distributor Omni United Pte. Ltd. has acquired Interstate Tire Distributor (ITD), a Commerce-based wholesaler with six locations in four Western states, and is evaluating sites on the West Coast for a mixing warehouse to help improve distribution efficiencies.
The Singapore-based company also said it is expanding the scope of its Timberland SUV/light truck tire brand.
The acquisition of ITD, for which terms are not being disclosed, will help Omni United strengthen its growing presence in the U.S., according to Omni United CEO G.S. Sareen.
“The acquisition of ITD is the next step in the evolution of Omni United as a tire designer and marketer,” he said, “and it will reinforce our presence in our core market, the United States.
“We are excited about the opportunity for growth, learning and innovation that this move towards vertical integration will present.”
Mr. Sareen said this deal was the best solution possible at this time for Omni to accelerate its sales presence in the U.S. and start moving away from being tied solely to the “container-load only” business model. Container-load customers have to be able to determine their shipment needs 45 to 90 days when ordering.
“We determined we had to gain access to a greater number of retailers,” he told Tire Business. “This takes us a step closer to achieving that goal.”
ITD provides Omni United with access to more than 3,000 customers throughout the Western U.S., said Mr. Sareen, who noted Omni is under-represented in these states.
Omni United generated $455 million in revenue globally in 2014, with close to two-thirds of this in North America. This acquisition will help push that volume to $500 million or more, Mr. Sareen said.
While this acquisition is a significant step forward, Mr. Sareen said establishing a mixing warehouse in the area with access to a port is still a high priority.
ITD's warehouses are in the 40,000- to 50,000-sq-ft. range, he said, which limits their storage capability and yields logistics inefficiencies. A mixing warehouse would help increase efficiencies for ITD and open up Omni's brands to thousands of smaller customers.
ITD was founded in Los Angeles in 1963. Since then, the company has grown to six locations—Commerce, Fullerton and San Bernardino, Calif.; Phoenix; Salt Lake City; and Las Vegas—servicing 2,500 tire retailers throughtout the western U.S., Omni United said.
The wholesaler's three principals, John Farkas, Scott Simpson and Matt Seavers, will remain on under Omni United's ownership as senior
leadership, running the day-to-day operations.
Mr. Farkas, president of ITD, called Omni United a “company that shares the same philosophy and commitment to excellent service and high quality products.
“Omni United wants to grow ITD's existing business into a much larger company, with larger warehouse facilities and additional product offerings.”
ITD will add Omni United's brands —Radar, Roadlux and Timberland—to its existing portfolio, which includes leading mid-tier brands such as Toyo, Nexen and Yokohama as well as value-driven brands such as Mastercraft, Duro, Atturo and Good-ride, the latter of which is also an Omni United brand.
ITD states on its website that it offers twice-daily deliveries in most metro areas that it serves and is open Sundays as well.
Omni United said this deal does not affect its supply relationships with other wholesale distributors, Mr. Sareen said.
The company distributes in Canada and Mexico through independent importers/distributors, he added.
Omni United is considered a “contract manufacturer”—a company that's involved in the design of the products it has manufactured for it by third-party tire makers. Omni sources its branded products from tire makers in China, Thailand and the U.S.
Mr. Sareen founded the company in 2003 in Singapore.
Omni United established its U.S. headquarters in 2006 in Traverse City, Mich. That company, Omni United USA Inc., operates one warehouse in the U.S., in Fairfield, Calif., that it opened in 2013. It likely will be consolidated with ITD's operations in California, Mr. Sareen said.
The company's plans for the Timberland brand include adding an all-terrain light truck version that it's cross-promoting with outdoor shoe brand Timberland L.L.C., along with increasing the size range of the Timberland Cross SUV line.
Omni United said it also is upgrading its Radar Renegade M/T light truck line, incorporating design features gleaned from experience in off-road racing into the new R7 line—targeted at serious off-road enthusiasts.
Launched at the 2014 Specialty Equipment Mar-ket Association Show, the Timberland brand is produced by Cooper Tire & Rubber Co. and is tied to an initiative to ensure the tires are recycled back into Timberland shoe soles.
Omni is rolling out the Timberland A/T—which the company said is designed to deliver genuine off-road traction without sacrificing on-road comfort—in 30 sizes and backing it with a 50,000-mile treadwear warranty. Omni United credits features such as stabilizer ribs between the large tread blocks and beveled block points for helping to create the tire's “balanced” on- and off-highway performance.
The Timberland A/T's sizes start at 31x10.50R15LT and range up to LT275/65R20.
At the same time, Omni is adding 15 sizes to the Timberland Cross range launched last year, expanding it to 35 sizes. The size range now starts at 215/70R16 and scales up to 275/60R20; suggested retail pricing ranges from $174 to $299.
The tire is available in both blackwall and raised outline white lettering and is backed by a 65,000-mile warranty, the distributor said. Suggested retail prices range from $142 to $229.
Omni United said the target market for Timberland-brand tires is the same audience that knows and buys Timberland footwear, apparel and accessories—that is, active people who enjoy spending time outdoors and connecting with friends and family.
“We want to demystify tires for this audience, and bring some of the excitement and sizzle of the fashion industry to our category,” Mr. Sareen said.
The Radar Renegade R7 M/T will complement the Renegade R5 M/T, which launched in 2013 and has been Omni United's tire of choice for competition in off-road racing.
Among the tire's “race-inspired” features is a raised nub stone ejector between the tread blocks that deforms when the tire is rotating to help eject stones that otherwise would be trapped. The R7 also features a third reinforcing ply that helps strengthen and stiffen the tire to reduce the risk of punctures in the sidewall and tread areas, along with upper shoulder side-biters for added traction in loose surface conditions.
Omni United will launch the R7 M/T with 14 raised outline white letter LT sizes—ranging from LT245/75R16 to 35x12.5050R20LT—with 16 more sizes, including a pair of 22-inch rim diameters, to follow in 2016.
The R7 is manufactured by Dongying Zhongyi Rubber Co. Ltd. of Dongying, China, according to the tire's DOT code, XU.
Omni United also disclosed that its Timberland tire program was recognized recently at Ethical Corp.'s Sixth Annual Responsible Business Awards ceremony as runner-up for the “Sustainable Innovation” category, which recognizes efforts of incorporating sustainability into commercial objectives or a business challenge.
The awarding judges noted: “Timberland has launched a highly innovative partnership into a new commercial segment with sustainability underlying its business venture.”