Tractor-trailer tire retreader Bandag Inc. announced Friday that it has purchased a controlling stake in Speedco Inc., a U.S. chain of quick-lubes for trucks. Speedco had been a partnership between the companys founders and Shell Oil Products US, but Shell sold its interest as part of the transaction.
Bandag, which is based in Muscatine, Iowa, paid $56 million to acquire an 87.5 percent stake in Speedco and to retire $20.1 million of debt. Speedcos three founders retain 12.5 percent of the company, as well as their management positions.
Bandag said it expects to create synergy by combining Speedcos oil change operations with its own tire services.
Lubrication and tires are the trucking industry’s two most frequent preventive maintenance needs, Chairman and Chief Executive Officer Martin G. Carver said. Given Bandag’s and Speedco’s respective leadership in their service sectors, the strategic fit is excellent. Speedco’s service reputation and nationwide on-highway presence create a solid platform for the expanded delivery of en-route maintenance services both now and in the years to come.
Speedco, which is based in Cayuga, Ind. and which claims to be the only nationwide chain of truck quick-lubes, was founded 11 years ago by President and Chief Executive Officer Mark Clark, Treasurer Jeff Clark and Vice President for Planning and Development Jim Dudley. Shell bought into the business in 1996 and increased its stake to 75 percent two years later. As part of last weeks transaction, it sold that stake to Bandag.
This was an opportunity for Shell to realize a return on its investment, Shell spokesman Johan Zaayman said. Shell declined to disclose how much of a return it made, but Zaayman added that the deal included an agreement for Shell to supply Speedco with Shell Rotella T Heavy Duty Engine oil and other Shell lubricants for the next 10 years.
Speedco owns 26 quick-lube centers located on highways in the United States and has licensed six others. Bandag manufactures retreading materials and equipment for a worldwide network of 1,000 franchised dealers that make and sell retread tires. It also owns a subsidiary, Tire Distribution Systems Inc., that sells and services new and retread tires.