Print | Share | Reprint

TBC kicks Midas' tires

by Richard Collings | Published March 14, 2012 at 9:22 AM

TBC Corp., an affiliate of Japanese financial conglomerate Sumitomo Corp., has reached a deal to acquire automotive service and repair chain Midas Inc. in a $310 million deal.

Palm Beach Gardens, Fla.-based TBC has agreed to pay $11.50 per share, or $173 million, in cash and assume $137 million in debt and pension liabilities, the companies said Tuesday, March 13.

Itasca, Ill.-based Midas' stock traded up 27.5%, to $11.46, Tuesday afternoon on the news.

The $11.50 per share offer is a 75% premium over Midas' closing price of $6.58 on Aug. 11, 2011, when the automotive service chain announced it would conduct a strategic review.

Midas has agreed not to solicit any competing offers. The merger agreement includes customary termination fees payable by Midas under certain circumstances. The amount of the breakup fee was not provided.

The deal has been approved by the board of directors at each company and Midas' chairman and chief executive, Alan Feldman, signed a tender and voting agreement in support of TBC's offer. The deal is expected to close by the end of the second quarter.

Midas consists of more than 2,250 franchised automotive service shops in 14 countries, including about 1,500 in the U.S. and Canada. It offers brake, maintenance, tires, exhaust, steering and suspension services. Midas also owns the SpeeDee Oil Change & Tune-Up business, which has 161 locations in the U.S. and Mexico.

TBC, a multichannel marketer of automotive replacement tires, is owned by New York-based Sumitomo Corp. of America, a subsidiary of Japan's Sumitomo Corp. It operates Carroll Tire, a regional tire wholesale distributor servicing independent tire retailers in the U.S. In addition, TBC runs mores than 1,200 franchised and company-owned automotive service centers under the Tire Kingdom, Merchant's Tire & Auto Centers, NTB-National Tire & Battery and Big O Tires names.

The automotive retail deal is the second in recent months. On Jan. 30, Los Angeles-based private equity firm Gores Group LLC picked up automotive parts retailer Pep Boys-Manny, Moe & Jack for $790 million in cash and roughly $210 million in assumed debt.

J.P. Morgan Securities LLC is Midas' financial adviser, and Kirkland & Ellis LLP provided legal advice. The Kirkland team includes Carol Anne Huff, Thomas Christopher, Matthew O'Brien and Peter Marshall.

TBC's financial adviser is Morgan Joseph TriArtisan LLC. Its legal adviser is Morgan, Lewis & Bockius LLP. The Morgan Lewis team was led by Alan Neuwirth, Bradley Edmister and Shawmir Naeem and included James Sims III, Joseph Washington, Gary Rothstein, Harry Robins, Kenneth Kail and David Sirignano.

Share:

Consumer & Retail

TBC kicks Midas' tires

Free preview

Meet the journalists

Richard Collings

Senior Writer: Consumer Products & Retail

Movers & Shakers

Video

Shop, then chop

Sectors