NASHVILLE, TN, and MUSCATINE, IA Bridgestone Americas Holding, Inc. and Bandag, Inc. have entered into a merger agreement through which Bridgestone Americas will acquire the outstanding shares of each class of stock of Bandag for $50.75 per share in cash. The transaction is valued at approximately $1.05 billion.
The Board of Directors of Bandag has unanimously approved the agreement. The transaction is expected to close late in the first quarter or early in the second quarter of 2007, subject to the receipt of shareholder and regulatory approvals, as well as the satisfaction of other customary closing conditions. Certain shareholders, including Carver Partners LP and Martin Carver, Bandag’s chairman and CEO, have entered into separate agreements pursuant to which they have agreed, subject to certain conditions, to vote their shares in support of the transaction.
Bandag is a leading manufacturer of tire retreading materials and equipment. Based in Muscatine, IA, Bandag has a global network of more than 900 franchised dealers that produce and market retread tires and provide tire management services. In addition, Bandag owns and operates Tire Distribution Systems, Inc. (TDS), a commercial retail operation that sells and services new and retread tires, and it holds an 87.5 percent interest in Speedco, Inc., a provider of on-highway truck lubrication and routine tire services to commercial truck owner-operators and fleets. In 2005 Bandag had worldwide sales of $921 million. Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of Bridgestone Americas Holding, Inc.
“Bandag is a leader in the retreading business, with a strong global reputation for quality, service and technology, as well as an extensive worldwide dealer network,” said Mark Emkes, chairman and CEO of Bridgestone Americas Holding, Inc. “The joining of Bridgestone Americas and Bandag will allow the two companies to better service their customers by offering a comprehensive tire maintenance solution, backed by a complete line of new and retread truck tire offerings.”
According to Carver, “The combination of Bridgestone Americas and Bandag will benefit our dealers and enhance their business futures. The transaction combines the strength of two well-run and respected companies, and will allow our dealers to go to market with an even more complete product offering.”
Transportation companies actively seek tire management programs that start with premium new tires and take them through the retread process, which can ultimately conserve natural resources. The joining of the world’s largest tire and rubber company with the premier global brand in retreading is aimed at providing customers with a total tire offering, a streamlined way to manage their needs throughout a tire’s life cycle.
Bandag and Bridgestone Americas have a decades-long business relationship. TDS stores have been authorized dealers of Bridgestone Americas’ tires, and many GCR Tire Centers, units of Bridgestone Americas’ subsidiary, BFS Retail & Commercial Operations, LLC, which service the commercial and off-the-road trucking industry, are Bandag dealers.
Retreads and new Bridgestone tires are complementary, servicing different customer needs. Retreading enables customers to get the full value of a new tire by reusing the tire’s casing again and again. As such, it is an integral part of a successful total tire management system.
According to Emkes, the combination of the two companies makes good business and economic sense. “Bandag’s history of success in the retread market and the similarities in the companies’ business models, distribution networks, customer base and respect for employees make this a perfect fit.”
JPMorgan acted as financial advisor to Bridgestone Americas while William Blair & Company, L.L.C. acted as financial advisor to Bandag.
Jones Day was the legal advisor to Bridgestone Americas, and Foley & Lardner LLP was the legal advisor to Bandag.