Key Takeaways
- • Ares Management's Private Equity Group has acquired a significant stake in American Tire Distributors (ATD), resulting in equal 50/50 ownership with TPG Capital, which held majority control for the prior five years.
- • The transaction involved Ares purchasing approximately 46.7% equity from TPG, according to credit ratings analysis, though transaction terms and final valuation were not disclosed at announcement.
- • The deal positions ATD with dual institutional sponsors—both prominent alternative asset managers—to accelerate expansion as North America's leading tire distributor, with management noting significant expansion opportunities ahead.
- • TPG offered its limited partners a significant return on their original investment while maintaining ongoing upside participation through continued 50% ownership in the business.
- • The transaction is subject to customary closing conditions; no financing details or deal timeline were specified in the announcement.
Summary
American Tire Distributors announced on February 3, 2015, that a fund managed by Ares Management's Private Equity Group has entered into an agreement to acquire a substantial minority stake in the company, elevating Ares to equal co-ownership alongside TPG Capital. The transaction results in a 50/50 ownership split, effectively restructuring ATD's capital base after TPG's five-year tenure as majority shareholder. According to credit ratings commentary, Ares is acquiring approximately 46.7% of ATD's equity in the transaction.
Bill Berry, ATD's President and Chief Executive Officer, characterized the investment as a significant milestone in the company's growth trajectory. Berry acknowledged TPG's historical guidance while positioning the partnership with Ares as additive to management's execution capabilities. David Kaplan, Co-Founder and Senior Partner at Ares Management, emphasized the firm's investment thesis: acquiring "strong franchises with proven management teams" and facilitating their expansion to full potential—language consistent with Ares' established private equity strategy of value creation through operational support rather than financial engineering alone.
TPG's Jonathan Coslet, Chief Investment Officer, framed the transaction as delivering material returns to the firm's limited partners while enabling them to maintain equity participation in what TPG characterized as a "best in class franchise." This structure—partial exit with continued upside exposure—reflects a common institutional investor strategy of crystallizing gains while preserving optionality on future appreciation.
The transaction underscores institutional investor confidence in ATD's market position within North America's tire distribution sector. Both sponsors publicly cited the company's track record and expansion opportunities, though no specific growth targets, market share metrics, or strategic initiatives were detailed in the announcement. Deal terms remained undisclosed, and closing was noted as subject to customary conditions.
Bill Berry, ATD's President and Chief Executive Officer, characterized the investment as a significant milestone in the company's growth trajectory. Berry acknowledged TPG's historical guidance while positioning the partnership with Ares as additive to management's execution capabilities. David Kaplan, Co-Founder and Senior Partner at Ares Management, emphasized the firm's investment thesis: acquiring "strong franchises with proven management teams" and facilitating their expansion to full potential—language consistent with Ares' established private equity strategy of value creation through operational support rather than financial engineering alone.
TPG's Jonathan Coslet, Chief Investment Officer, framed the transaction as delivering material returns to the firm's limited partners while enabling them to maintain equity participation in what TPG characterized as a "best in class franchise." This structure—partial exit with continued upside exposure—reflects a common institutional investor strategy of crystallizing gains while preserving optionality on future appreciation.
The transaction underscores institutional investor confidence in ATD's market position within North America's tire distribution sector. Both sponsors publicly cited the company's track record and expansion opportunities, though no specific growth targets, market share metrics, or strategic initiatives were detailed in the announcement. Deal terms remained undisclosed, and closing was noted as subject to customary conditions.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.