SSG Capital Advisors acted as the investment banker to A to Z Tire & Battery, Inc. in the placement of a $21 million revolving credit facility. Proceeds will be used to refinance existing indebtedness and provide capital to support the Company's ongoing growth. The transaction closed in November 2014.
A to Z is one of the leading independent tire distributors in the United States, supplying more than 12,000 different light truck, passenger and medium truck radials, as well as industrial and agricultural tires and supplies. Headquartered in Amarillo, TX, the Company offers a broad selection of tire products and related services at competitive prices through a network of more than 5,000 dealers. Over the last 88 years, the Company has built an infrastructure of warehouses, satellite locations, retail stores, and retread plants to service customers throughout the Midwest and Rocky Mountain regions.
In 2009, the United States imposed an elevated tariff on Chinese passenger and light truck tires imports resulting in an increase in tire prices and losses for U.S. tire importers. The tariff forced the Company to reduce its product offerings due to the cost of importing certain brands and weakened the Company's financial performance.
Management instituted a bold change in business strategy by focusing on wholesale revenue and closing certain unprofitable or marginally profitable retail stores. Substantial revenue growth from this new strategy started in earnest once the Company instituted additional just-in-time delivery capabilities which were expanded throughout 2013. The ability to provide fast service to customers entrenched A to Z in customer supply chains and resulted in double-digit revenue growth year over year. A to Z invested heavily in building out the required infrastructure to support its wholesale focus, and as a result, needed a new lender willing to grow with and support the Company as its profitability continues to improve.
SSG was retained as A to Z's investment banker to source a new credit facility that would fully support the Company's growth plan. SSG canvassed a wide range of lenders, ultimately delivering multiple, competitive term sheets. The financing will provide A to Z the runway to continue its substantial growth.
Other professionals who worked on the transaction include:
- Steven L. Hoard of Mullin Hoard & Brown, LLP, counsel to A to Z Tire & Battery, Inc.; and
- Ronald A. Weiner, Anisa I. Abdullahi and Nicholas A. Passarello of Arnall Golden Gregory LLP, counsel to the New Lender.
SSG professionals on this transaction include:
- Matthew P. Karlson, Managing Director
- Michael Goodman,Managing Director
- Nicholas Coder,Associate
- Andrew E. Finley,Analyst
SSG Capital Advisors is an independent boutique investment bank that assists middle-market companies and their stakeholders in completing special situation transactions. SSG has initiated, structured and negotiated numerous financing transactions at every level of the capital structure on behalf of both growing businesses and those in transition. We focus on providing solutions that are customized to the performance of the business and the objectives of the business owner. SSG has a proven track record of closing over 250 transactions in North America and Europe and is one of the leaders in the industry.