- National Tyre and Wheel (NTD) has finalised its nearly $49 million purchase of Tyres 4U (T4U) in Australia and New Zealand
- In July, the companies entered an acquisition agreement to buy T4U's business assets and business liabilities
- Under the deal, NTD will takeover T4U's importing, wholesale and retailing business
- NTD's CEO Peter Ludemann says everyone at T4U and NTD is pleased with the transaction and opportunities it presents
- The company has renegotiated its debt facilities with the Commonwealth Bank of Australia to pay for the acquisition
- On market close, NTD is up 1.04 per cent and is trading for 48.5 cents per share
National Tyre and Wheel (NTD) has finalised its purchase of Tyres 4U's (T4U) business assets for nearly $49 million.
Last month, the company entered into a conditional agreement to buy T4U. Under the agreement, NTD will takeover T4U's importing, wholesale and retailing business.
NTD bought the business for $43.8 million in cash and $4.9 million in shares.
CEO Peter Ludemann says everyone at T4U and NTD is extremely excited about this transaction and opportunities it presents.
"I have no doubt that this transaction will allow T4U to offer better solutions and services to suppliers and customers as we navigate our way through the very challenging pandemic period," he stated.
To pay for the purchase, NTD has renegotiated its debt facilities with Commonwealth Bank of Australia.
The new debt facilities will include financial accommodation to refinance existing facilities, assist with the purchase and provide new facilities for working capital.
The facilities that will be available to NTD on this renegotiation include a multi-option facility, equipment facility of $5.5 million, contingent liability facility of $7 million and a credit card facility of $1 million.
"The market rate term loan element of the Multi Option Facility essentially refinances NTAW term debt that existed before the T4U acquisition," the company explained.
"The Equipment Finance Facility is available for the purchase of vehicles and other equipment. The Contingent Liability Facility will be used to provide bank guarantees, letters of credit and similar instruments to suppliers and Lessors," it added.
2020 Financial Year
NTD has previously issued a guidance for the FY20 operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) to be between $10.5 million and $11 million, this is prior to the acquisition.
The company is expecting to publish its FY20 results by the end of the month.
On market close, NTD is up 1.04 per cent and is trading for 48.5 cents per share.