- Tyre company National Tyre & Wheel (NTD) has entered into a conditional agreement to buy Tyres4U (T4U)
- Once the purchase is complete, it’ll make NTD one of the largest tyre wholesalers in Australia and New Zealand
- Under the agreement, NTD will take over T4U’s importing, wholesale and retailing business assets in both countries
- In total, those assets are believed to be worth around $52 million
- Following the news of the acquisition, shares in NTD closed up 16.3 per cent at 50 cents per share
Tyre company National Tyre & Wheel (NTD) has entered a conditional agreement to buy Tyres4U (T4U).
Under the agreement announced today, NTD will take over T4U’s entire importing, wholesale and retailing business assets in both Australia and New Zealand.
Those assets are estimated to be worth around $52 million in total.
It’s an attractive deal for NTD, as once its finalised, it will make the company one of the largest tyre wholesalers in both Australia and New Zealand.
It also allows NTD to enter into new markets, such as the sale of SUV tyres and car tyres.
Speaking on the opportunity, NTD CEO, Peter Ludemann, said it was obvious the two companies would benefit from merging.
“Different business models, different products and different routes to market made it immediately obvious that everyone could benefit from getting together, without disturbing our core businesses or values,” he said.
“I’m really pleased to have found a way to do that,” he added.
Under the terms of the agreement, a cash consideration of $43.6 million will be paid by NTD to T4U.
NTD will also issue more than $5 million worth of shares to the company and incur transaction costs of around $1.9 million.
The deal between the two competing tyre companies is expected to be finalised by the end of the month.
NTD shareholders reacted well to the news, with shares in the company increasing by 16.3 per cent, to close at 50 cents each on July 17.