Tyre outlet and wholesaler National Tyre & Wheel (ASX:NTD) will be buying private franchise Tyres4U. Once the deal is complete, it will be one of the largest tyre wholesalers in Australia and New Zealand.

Tyres4U has been in business for 30 years and has 32 company owned and 34 licensed stores under the brand ‘Tyreright’ in addition to its wholesaling business with 15 locations across Australia and New Zealand.

National Tyre & Wheel says this acquisition – which will cost $48.8 million funded cash, debt and NTD shares; will help it enter a number of tyre markets such as bus and truck tyres. The pair of companies sold more than 2.5 million tyres and had $450 million in revenue between them in the last financial year.

The company anticipates the integration will be seamless and complete by the end of the month.


“Hardly a better time”

NTD chief executive Peter Ludemann revealed this acquisition was first discussed a number of years ago. However it took industry changes to get the deal over the line.

“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 – even though the tyre industry has proved to be resilient over the past few months, there can hardly be a better time to turn diversity and scale into a better outcome for our suppliers, customers, people and shareholders.”

The news comes just a fortnight after the company told shareholders trading results in May and June had exceeded expectations. It expects full year operating earnings between $10.5 million and $11.0 million.

Shares climbed 16 per cent at market open and despite falling in February sit a modest 8 per cent higher in 2020.

NTD share price graph