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ATD Buying Another Canadian Tire Distributor

The TriCan Tire Distributors subsidiary of American Tire Distributors Holdings (ATD) has entered into a deal to purchase Regional Tire Distributors Inc. (RTD) for roughly US$62.50 million, subject to post-closing adjustments. ATD expects the transaction to close by the end of April.

The acquisition would significantly expand ATD’s relatively new presence in Canada.

Burlington, ON-based RTD is a wholesale distributor of tires, tire parts, tire accessories, and related equipment operating five distribution centers in Ontario and four distribution centers in the Atlantic Provinces. RTD services approximately 3,100 customers.

Bill Berry, the president and CEO of ATD, said RTD has built a very strong presence in the eastern provinces in which it operates. “These nine distribution centers will complement the current TriCan operation, which has a leading market position across the Prairie Provinces and in British Columbia,” Berry explained.

As you may recall, ATD acquired Edmonton, AB-based TriCan back in November for US$97.50 million. This marked ATD’s entry into the Canadian market.

Following the close of the RTD deal, management plans to continue running its Canadian operation as a stand-alone business unit. Mike Kustra, currently president of RTD, will become president of the combined RTD/TriCan operation. Chris Fletcher, currently president of TriCan, will become non-executive chairman of the combined business.

The plan is to begin expanding the Canadian distribution centers this year to support a broader product offering. Management also intends to add “several” new distribution centers across Canada by opening greenfield locations and potentially acquiring other Canadian distributors.

ATD is already one of the largest independent suppliers of tires to the replacement tire market. Not including the pending RTD deal, ATD operates 123 distribution centers, including 15 distribution centers in Canada, serving some 70,000 customers across the United States and Canada.

ATD is a TPG Capital portfolio company.

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