ATD sells Canadian distributor NTD to Groupe Touchette

HUNTERSVILLE, N.C.— American Tire Distributors Inc. (ATD) has reached an agreement to sell its Canadian subsidiary, National Tire Distributors (NTD), to Canadian wholesaler Groupe Touchette Inc.

Terms of the deal — the most significant acquisition in the 40-year history of Montreal-based Groupe Touchette — were not disclosed. The transaction includes 26 NTD distribution centers across Canada, giving Groupe Touchette access to 52 D/Cs, in just about every province.

The deal is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including Canadian regulatory clearance.

Once the transaction is complete, Groupe Touchette said it will serve all major manufacturers and supply customers across Canada.

• Subscribe to Tire Business for more award-winning news and insight.

ATD President and CEO Stuart Schuette called the sale "an important step forward for NTD, ATD and the industry as a whole."

Once the deal closes, ATD essentially will no longer service the Canadian market.

Schuette lauded NTD, its customers and its 600 associates.

"Thanks to our agreement with Groupe Touchette, we are helping pave the way in developing a cleaner tire industry of the future, with technology-enabled connectivity and efficiency through our diverse line of products," Schuette said.

"We look forward to working with Groupe Touchette, as we push best practices and continue leading the pace of change in our industry."

As part of the agreement, ATD will supply Groupe Touchette with its proprietary Hercules and Ironman brand of tires while making its analytics software and productivity-enabling tools available to Groupe Touchette's network. Both have been a key focus for ATD over the last several years.

So what does this transaction mean for ATD's U.S. customers?

"The transaction provides ATD with resources, focus and flexibility to build on our momentum to deliver connected automotive solutions for the industry," an ATD spokesperson said. "With increased focus on our transformation and operations, we are driving our strategy forward, rolling out new tools and capabilities and growing our business by providing better services to our customers today than ever before."

In addition, ATD said the transaction helps to reduce emissions by increasing supply chain efficiency.

"With our commercial agreement with NTD and Groupe Touchette, we're excited to not only support the new combined company, but to help pave the way in developing a cleaner tire industry of the future, with technology-enabled connectivity and efficiency through our diverse line of products," the spokesperson said.

Groupe Touchette said the acquisition will enhance its ability to serve its customers and business partners with improved service, increased capacity and more choices to Canadian consumers. It also said the acquisition would create new job opportunities across Canada.

Nicolas Touchette and Frédéric Bouthillier, co-owners at Groupe Touchette, said they are "thrilled" to welcome NTD under the Groupe Touchette umbrella.

"In these challenging times, and in this ever-evolving industry, the environmental and technological realities bring a high complexity on a 360-degree perspective," the pair said in a statement. "Groupe Touchette's plan is to offer powerful solutions that drive efficiencies and streamline the supply chain for the benefit of customers, consumers and manufacturers. NTD's addition will help us reach our goal to best serve Canadians."

George McClean, president of NTD, said the transaction will benefit NTD, its "associates, business partners, customers and, ultimately, Canadian drivers."

"We are grateful to have been a part of ATD and for their vision, innovation and operational support that have positioned us for continued growth and success," McClean said. "Looking ahead, we are excited to become a part of Groupe Touchette, and we will work together to surpass the growing needs of our customers and consumers in Canada while increasing supply chain efficiency and reducing emissions."

Group Touchette, founded more than 40 years ago, said the combined business will continue to be headquartered in Montreal and will maintain a national support center in Burlington, Ontario, as well as regional offices across Canada.

According to the companies, Jefferies Group is serving as financial advisor to Groupe Touchette and Dentons and Prévost Fortin D'Aoust are serving as its legal counsel. Moelis & Company L.L.C. is a financial advisor to ATD, and Davies Ward Phillips & Vineberg L.L.P. and Troutman Pepper Hamilton Sanders L.L.P. are serving as its legal counsel.

Groupe Touchette has more than 1,000 employees and operates more than 24 distribution centers. Through its TireLink and DT Tire Banners, Groupe Touchette is servicing car manufacturers, car dealerships and independent tire retailers.

The company also serves Canadian consumers under the retail banners Tireland/Ici Pneu, Tire Partners/Pneu Solutions, Pneus Chartrand Mécanique, Pneus Express Mécanique and Touchette Motorsport.

Groupe Touchette recently closed a deal to buy fellow Quebec tire dealer Pneus Chartrand Distribution Inc., which operates both wholesale and retail businesses throughout the province.

That acquisition included two wholesale distribution centers, seven retail tire and auto service locations under the Pneus Chartrand Mécanique Inc. identity and a real estate company, Groupe Immobilier Chartrand, Groupe Touchette said.