Ares Management has signed an agreement with American Tire Distributors to acquire a significant stake in the company, resulting in equal ownership between Ares and TPG, the company’s current majority shareholder. TPG acquired American Tire Distributors (ATD) in April 2010 for $1.3 billion from Investcorp, Berkshire Partners and Greenbriar Equity Group.
“This transaction is another significant milestone in ATD’s growth story, and we are proud now to have two very notable investors as our primary shareholders,” said Bill Berry, President and Chief Executive Officer of American Tire Distributors. “The company appreciates the guidance TPG has offered for the past five years, and we look forward to the added experience and expertise of Ares as we continue to expand as the premier tire distributor in North America.”
American Tire Distributors is one of the largest independent suppliers of tires to the North American replacement tire market. Its offerings include flagship brands Bridgestone, Continental, Goodyear, Pirelli, and Michelin, as well as budget brands and private-label tires. ATD also markets custom wheels and tire service equipment. The company operates more than 140 distribution centers, including 25 distribution centers in Canada, serving approximately 80,000 customers. ATD has approximately 4,800 employees and is headquartered north of Charlotte in Huntersville, NC (www.atd-us.com).
“We are pleased to be able to partner with TPG to continue to grow ATD, a market leader with a demonstrated track record and significant expansion opportunities ahead,” said David Kaplan, Co-Founder, Senior Partner, and Co-Head of the Private Equity Group of Ares Management. “The company fits with Ares’ longstanding private equity strategy of acquiring strong franchises with proven management teams and helping them realize their full potential.”
Ares Management has $77 billion in capital under management and invests in private equity, leveraged loans, high-yield bonds, distressed debt and private debt. The Ares Private Equity Group manages approximately $10 billion of assets and is currently actively investing its fourth private equity fund which has $4.7 billion of committed capital. The firm has approximately 700 employees and is headquartered in Los Angeles with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).
“We welcome the opportunity to partner with Ares and the strong management team at ATD,” said Jonathan Coslet, Chief Investment Officer at TPG. “We are pleased to offer our limited partners a significant return on their investment while allowing them to continue to participate in the growth of this best in class franchise.”
TPG is a private investment firm founded in 1992 that makes investments throughout North America, Europe, Asia and Australia. Sectors of interest include industrials, retail, consumer, financial services, travel and entertainment, technology, media and communications, and healthcare. The firm has offices in San Francisco, Fort Worth, Austin, Dallas, Houston, New York, Beijing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, São Paulo, Shanghai, Singapore and Tokyo (www.tpg.com).
Bank of America Merrill Lynch, Goldman Sachs, and Deutsche Bank served as financial advisors and Ropes & Gray served as legal counsel to ATD and TPG. Sullivan & Cromwell served as legal counsel to Ares.
© 2015 PEPD • Private Equity’s Leading News Magazine • 2-4-15
