CLEVELAND — Bain Capital Private Equity has acquired majority ownership of Dealer Tire L.L.C., in order for the aftermarket tire and parts distributor to accelerate its growth and expansion.
The parties did not disclose the value of the deal. Dealer Tire generated $1.6 billion in revenue in 2017, according to Moody's research, from sales to car dealerships.
According to Dealer Tire, proceeds of the investment will be used to purchase the interests of Lindsay Goldberg L.L.C., Dealer Tire's investment partner since December 2014. The transaction, which is subject to customer closing conditions, including requisite regulatory approval, is expected to close in December.
Cleveland-based Dealer Tire said it will continue to operate under its current management team, led by CEO Scott Mueller and President Dean Mueller.
Bloomberg reported in January that Lindsay Goldberg was thinking about selling Dealer Tire; the story said Dealer Tire could fetch $2 billion, citing anonymous sources "familiar with the matter."
Scott Mueller, founding partner and CEO, said his firm was excited to enter a new partnership with Bain Capital because its "reputation, track record and investment philosophy align well with Dealer Tire's goals and values.
"As we move into our second century in the tire business, we believe our new partnership with Bain Capital will benefit all stakeholders and keep Dealer Tire well-positioned to remain an innovative industry leader."
Bain Capital has experience in the services, consumer and industrial sectors, Dealer Tire said. It has invested in a range of businesses including ASIMCO Technologies, American Trailer World, Autodistribution, BRP, Diversey, European finTyre Distribution, Genpact, MSX International, Sensata Technologies and TI Automotiv.
Bain said it has a team of approximately 240 investment professionals globally, with a global platform and expertise in several industries including health care, consumer/retail, financial and business services, industrials and technology, media and telecommunications.
"Dealer Tire has a unique value proposition that employs innovation and technology solutions to help customers and partners seize the significant opportunities in tire replacement sales and service," Joseph Robbins, a managing director at Bain Capital, said.
"We are excited to partner with the Mueller family and the talented management team they have assembled as they continue to expand the company's platform to support dealers, OEMs, tire manufacturers and web-based customers in accelerating their growth in this vibrant industry sector."
Mr. Mueller said his firm appreciated its partnership with Lindsay Goldberg and its "support has enabled us to expand our business and invest in opportunities that position us for continued growth."
J.P. Morgan and Moelis & Co. are serving as financial advisers, Debevoise & Plimpton as legal counsel and Ernst & Young as accounting advisor to Dealer Tire. Cowen is serving as financial adviser, Kirkland & Ellis as legal counsel, and PwC as accounting adviser to Bain Capital. Weil, Gotshal & Manges is serving as legal counsel to Lindsay Goldberg.
This has been one of several strategic moves Dealer Tire has made in 2018 to expand its platform. In May, it invested in SimpleTire L.L.C., an online marketplace with a virtual inventory model that facilitates web-based tire sales.
It also has invested in Tyrata Inc., a tire sensor and data management company.