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Bandag Shifts Tire Plants and Stores to Independent Dealers

Muscatine, IA— Bandag, Inc. announced that its wholly-owned subsidiary, Tire Distribution Systems, Inc. (TDS) plans to sell a total of 19 stores and nine retread plants to one current independent Bandag franchised dealer and one previous independent Bandag franchised dealer.

TDS has previously sold nine of its Tennessee commercial and retail outlets in 2003. Terms of the transactions were not disclosed. The shift of TDS locations into the hands of independent Bandag dealers began last year with the sale of several commercial and retail locations in Alabama, Georgia and Tennessee.

One of the two transactions involves the proposed sale of seven stores and three retread plants in the state of Louisiana and seven stores and three retread plants in the state of Mississippi. The buyer is Southern Tire Mart, L.L.C., Columbia, Mississippi. Southern Tire Mart is owned by two principals of a former Bandag dealer which TDS had purchased in 1997. As part of the transaction, Southern Tire Mart will have an option to purchase all five of the TDS retread plants and 10 of the 11 TDS stores in Texas. The option may be exercised at any time during the period beginning 18 months from the final closing of the sales and ending on a date which is 36 months from the final closing. Terms of the option were not disclosed. The proposed sale is subject to the execution of a definitive agreement and the continued availability of the buyer's financing.

In the second transaction, TDS has agreed to sell five stores and three retread plants located in the state of Arkansas to Trans American Holdings LLC, headquartered in Fort Smith, Arkansas. Trans American Holdings LLC has been a Bandag dealer since 1996.

The 2002 sales and operating losses were $105.9 million and $0.2 million, respectively, for the 2003 proposed and completed divestitures. TDS sales for all locations in 2002 were $364.9 million, with an operating loss of $11.4 million.

 

 

 

 

 


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