Tire Business

In 1985, SCOA established Treadways as a business dedicated to importing and selling Sumitomo brand tires. As the business grew, Treadways soon established itself as a specialized tire marketing company. In 2005, SCOA acquired TBC Corporation, a vertically integrated marketer of tires for the automotive replacement market. TBC’s retail operations include Company-operated tire and automotive centers under the “Tire Kingdom”, “Merchant’s Tire and Auto Centers”, and “National Tire & Battery” brands, and franchised stores under the “Big O Tires” brand. TBC markets on a wholesale basis to regional tire chains and distributors serving independent tire dealers throughout the United States, Canada and Mexico.

Through its Carroll Tire wholesale distribution centers, the Company also markets directly to independent tire dealers across the United States. Carroll Tire Company sells a wide variety of proprietary and national brands from 43 distribution centers across 16 states.

WHOLESALE SEGMENT

TBC’s wholesale business is mainly divided into two parts, including the national wholesale business and the regional wholesale business. Regarding the national wholesale business, TBC owns large warehouses to purchase tires from domestic and offshore tire makers, and subsequently sells the tires to distributors or big retailers.

The strengths of TBC’s business include:

  • Having a wide variety of tires from passenger vehicles to industry tires
  • Maintaining good relationships with customers by providing exclusivity
  • Benefitting from economies of scale associated with its market presence

Regarding the wholesale business, distributors purchase tires and sell them to retailers, including gas stations. TBC has 46 distribution centers, making them the second largest distribution business behind American Tire Distributors. Carroll Tire, for example, distributes proprietary and national brands from 43 distribution centers in 16 states. The private brand offering includes the Multi-Mile, Cordovan, Sigma, Vanderbilt, Sumitomo, Eldorado, Telstar, and Jetzon, and these brands are produced by nationally recognized manufacturers with a reputation for quality, safety and value. These brands are distributed through TBC private brands, and Treadways to independent retailers and wholesalers throughout the United States, Canada, and Mexico.

RETAIL SEGMENT

The Company’s retail operations include Company-operated tire and automotive centers under the “Tire Kingdom”, “Merchant’s Tire and Auto Centers”, and “National Tire & Battery” brands, and franchised stores under the “Big O Tires” brand.

In April 2012, TBC acquired Midas,one of the world’s largest providers of auto repair and maintenance service, with 2250 franchised and company-owned service store locations across 14 countries, including 1,500 in the U.S. and Canada.

In the United States, there is an increasing need for auto repair and maintenance due to industry factors such as growing vehicle age. Prior to the Midas acquisition, TBC had approximately  1,200 outlets in the U.S. providing after-service for automobiles, including tire sales. With the acquisition of Midas, SCOA has acquired an additional 1,500 outlets in North America providing auto repair and maintenance service under a widely recognized and well-established brand name. The Midas acquisition further strengthens the growing auto repair maintenance business of TBC by expanding the number of store outlets in North America to approximately 2,700. Furthermore, TBC will strengthen its revenue base by realizing various synergies such as increased tire sales and parts procurement in the expanded organization.

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