American Tire Distributors Inc. (ATD) says it has entered an asset purchase agreement with “a buyer entity.”
According to ATD, the entity includes “credit funds and accounts managed by Guggenheim Partners Investment Management LLC, KKR, Monarch Alternative Capital LP, Sculptor Capital Management Inc. and Silver Point Capital, L.P., collectively, the ‘Ad Hoc Lender Group.’”
ATD categrorizes the agreement with the aforementioned entity as a "stalking horse agreement."
"We are taking the expected next step in our process to best position ATD for long term-success and as a stronger partner to manufacturers and customers who rely on us for their business needs," says Jim Bienias, chief restructuring officer of ATD and partner and managing director at AP Services LLC, an affiliate of AlixPartners LLP.
“We appreciate the Ad Hoc Lender Group's support and strong belief in our business and associates. We look forward to working with them as we continue our court-supervised process to transition the company's ownership and ensure value is maximized for all stakeholders.
“All of us at ATD are grateful for the support we have received from our manufacturer partners and customers since we began this process,” he continues.
“We look forward to continuing to work with them and help them drive their businesses. I'm also thankful to all of our associates for their continued hard work and dedication to ATD."
According to a statement from ATD, “the APA contemplates that substantially all of the company's assets will be acquired through a credit bid of certain of the company's funded debt, as well as additional consideration, including the assumption of post-petition trade payables and other liabilities, which will reduce ATD's debt by $1.3 billion and significantly enhance its operational flexibility.
"Additional details regarding the consideration for the transaction is included in court filings. The APA will be subject to a competitive sale process pursuant to Section 363 of the U.S. Bankruptcy Code (the ‘sale process’), during which ATD is soliciting and may consider other bids submitted by third parties, in accordance with certain court-approved bidding procedures.
"Accordingly, the APA will be subject to higher and otherwise better offers, court and regulatory approval and other closing conditions.
“The court approved the bidding procedures for the sale process, which set forth the procedures for the submission of other bids, after a hearing on November 26, 2024. The company expects to operate normally throughout the sale process, which it intends to complete in early-2025.”
