Despite IPO Plans, P.E. Owner Puts Company on the Block

Owner TPG is looking to peddle American Tire Distributors to another private-equity firm.
Iris DorbianAugust 21, 2014

Even though American Tire Distributors filed for an IPO in June, the company’s owner, private-equity firm TPG, is trying to unload it to other buyout shops, the Wall Street Journal reported.

American TireNorth America’s largest distributor of replacement tires is being courted by a bevy of private equity firms in an auction that could possibly reap more than $3 billion, according to the paper.

The auction is in keeping with a trend in which private-equity firms are selling companies they own to other buyout firms. The strategy is seen as providing a “cleaner exit” than an IPO offers, the Journal observed.

Sources told the Journal that if TPG does not sell American Tire Distributors, it will seriously consider moving forward with the IPO.

This isn’t the first time the tire-distribution company has flirted with launching an IPO only to change course later on. It also filed for an offering in 2010, then was purchased by TPG.

For its fiscal year 2013, which ended in December, the company reported sales of $3.8 billion. The company acquired American Tire Distributors earlier this year for more than $300 million.

Source: Private-Equity Firms Pursue Buyout of American Tire