American Tire Distributors Moves Forward with Strategic Asset Deal

American Tire Distributors Pursues Asset Purchase Agreement

American Tire Distributors, Inc. ("ATD") has made headlines with its recent announcement of entering into a significant asset purchase agreement ("APA") with a select buyer group. This group, known as the Ad Hoc Lender Group, includes prominent figures in finance who are backing ATD’s restructuring efforts. The agreement is a crucial step toward ATD's long-term stability and success in the tire distribution industry. Jim Bienias, ATD's Chief Restructuring Officer, emphasized the critical nature of this agreement for positioning ATD as a desirable partner for manufacturers and customers alike.

Restructuring for Future Success

This asset purchase agreement is designed to facilitate the acquisition of almost all of ATD's assets through a credit bid tied to its funded debt. Furthermore, it involves considerations to handle certain trade payables and other liabilities, aiming to alleviate ATD's debt burden by an impressive $1.3 billion. This debt reduction is expected to greatly enhance ATD's operational flexibility and strategic initiatives moving forward.

Collaboration with Key Stakeholders

In the wake of this development, ATD has expressed gratitude toward its manufacturer partners, customers, and associates who have shown unwavering support throughout this transition. Bienias acknowledged their cooperation and enthusiasm for driving business growth together. This positive momentum is crucial as ATD navigates its court-supervised sale process to ensure maximum value for all stakeholders involved.

Navigating the Court-Supervised Process

The APA will undergo a competitive sale process in accordance with the regulations set forth in the U.S. Bankruptcy Code. This process allows other potential buyers to submit bids, ensuring ATD has the best possible terms for its future ownership structure. The Court has already approved the bidding procedures, which were discussed in a recent hearing. ATD intends to continue its regular operations during this transitional phase and aims to finalize this process by early 2025.

About American Tire Distributors

ATD is recognized as one of the largest independent suppliers of tires in the replacement tire market. With over 115 distribution centers across the United States, it serves roughly 80,000 customers. The company prides itself on providing extensive inventory choices, reliable delivery, and various value-added services tailored to tire and automotive service customers. Approximately 4,500 employees work diligently within ATD's distribution network.

Acknowledging Continued Achievements

In the past year, American Tire Distributors has earned several prestigious awards, notably the Environment+Energy Leader Award and multiple accolades from The American Business Awards. These achievements highlight ATD's commitment to excellence in service and sustainability within the automotive and transportation sectors.

Contact Information for Media Inquiries

For further information or media inquiries, please reach out to Aaron Palash, Richard M. Goldman, and Carly King at Joele Frank, Wilkinson Brimmer Katcher. Interested parties can also contact them via phone for additional assistance.

Frequently Asked Questions

What is the asset purchase agreement related to?

The asset purchase agreement is aimed at facilitating a transition of ownership while reducing ATD's debt load by approximately $1.3 billion.

How will the asset sale process proceed?

The asset sale will be conducted under Section 363 of the U.S. Bankruptcy Code, allowing competitive bids from other parties.

When does ATD expect to complete this sale process?

ATD aims to complete the sale process by early 2025.

What impact will this acquisition have on ATD?

The acquisition is expected to significantly improve ATD’s operational flexibility and long-term success in the tire distribution market.

Who were the key advisors for ATD during this process?

Kirkland & Ellis LLP, Moelis and Company LLC, and AlixPartners are among the key advisors assisting ATD throughout its restructuring journey.

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