TA Associates Buys Dealer Tire Stake

TA Associates has acquired a minroity stake in Dealer Tire LLC, a Cleveland-based provider of logistics and program management services for the replacement tire market. No financial terms were disclosed.

PRESS RELEASE

TA Associates, a leading growth private equity firm, today announced it has completed a minority investment in Dealer Tire, LLC, the leading provider of logistics and program management services to assist automobile manufacturers and dealers in selling replacement tires and parts to service customers. Financial details of the investment were not disclosed.

Headquartered in Cleveland, Dealer Tire is the only national firm exclusively dedicated to helping original equipment automobile manufacturers design, implement and manage profitable tire programs for their dealerships that, in turn, increase customer satisfaction, customer safety and customer retention. Dealer Tire manages a network of 20 distribution centers and provides same-day or next-day delivery services nationwide, which enables its dealer customers to offer drivers the right tire fitments during one service visit. Dealer Tire has established national programs with Audi, BMW, Infiniti, Jaguar, Kia, Land Rover, Lexus, Mercedes-Benz, MINI, Nissan, Saab, Toyota and Volkswagen. The company’s mission of finding and replacing bald tires at dealerships has resulted in millions of safer vehicles on the road.

“We are very pleased to complete this investment in Dealer Tire,” said M. Roy Burns, a Senior Vice President, TA Associates. “We have closely followed Dealer Tire’s rapid growth over the years and have admired its win-win-win business model. Automobile dealers have long faced customer retention challenges in their service departments, and replacement tires are a major defection point away from dealers. Dealer Tire provides dealers with the tools necessary to offer their customers better service and to do so profitably.”

“We welcome this partnership with TA,” said Scott Mueller, CEO, Dealer Tire. “Our company prides itself on an innovative approach and an accomplishment-driven culture. TA shares this philosophy, and we look forward to working closely with them as we continue our mission to implement programs that create substantial value for automotive OEMs, auto dealers and their customers.”

Dealer Tire has been at the forefront of investing in technology to provide its dealers with better than 99.95% delivery accuracy. Dealers see real-time inventory and receive to-the-minute estimates of when deliveries will arrive, allowing them to plan their service operations more efficiently. This technology also enables Dealer Tire to provide its dealer customers with valuable merchandising insight.

“Due to the efforts of Dealer Tire, automobile dealers have doubled their market share of the replacement tire market over the last decade,” said Michael S. Berk, a Managing Director, TA Associates. “Despite the advantage of recurring customer visits, auto dealers have undersold replacement tires historically due to inventory requirements and lack of training. Dealer Tire is changing this distribution channel by equipping dealers with the tools, training and logistical support to improve sales to and retention of their existing flow of service customers.”

TA Associates has more than four decades of investing experience, focusing on profitable growth companies. Some of TA’s prior investments in business services include Asurion, Cardtronics, Drive Assist, IntraLinks, Preferred Freezer Services and TARGUSinfo.

In connection with the investment, Roy Burns and Michael Berk will join the company’s Board of Directors. Goodwin Procter LLP provided legal counsel and Deloitte LLP provided accounting services to TA Associates. Benesch, Friedlander, Coplan & Aronoff LLP served as legal counsel and Bank of America Merrill Lynch provided financial advisory services to Dealer Tire.

About Dealer Tire

Founded in 1999, Dealer Tire helps original equipment automobile manufacturers design, implement and manage profitable tire programs for their dealerships, in turn increasing customer satisfaction, customer safety and customer retention. Dealer Tire’s mission of finding and replacing worn tires at dealerships has resulted in millions of safer vehicles on the road. Through its 20 distribution centers around the country, Dealer Tire manages tire replacement programs for 13 automotive OEMs and serves more than 4,000 auto dealers. More information about Dealer Tire can be found at www.dealertire.com.

About TA Associates

Founded in 1968, TA Associates is one of the largest and most experienced private equity firms. The firm has invested in nearly 400 companies and manages more than $16 billion in capital. With offices in Boston, London, Menlo Park and Mumbai, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. More information about TA Associates can be found at www.ta.com.