Client Profile

Big 10 Tires ("Big Ten Tires" or the "Company")is one of the largest independent tire dealers in the southeastern U. S. Headquartered in Mobile, Alabama, the Company specializes in offering its recurring customer base the broadest selection of tire products and competitive pricing. Over Big 10's 54-year history, the Company has built a portfolio of retail stores defined by their strategic location in major metropolitan areas. Big 10's stores are free standing and are often in high traffic areas or in close proximity to shopping centers, highways and well-known roads. As a result of their broad product suite and deep market penetration, Big 10 has become the 'tire dealer of choice' through its stores in Alabama, Florida and Georgia.

Situation

Sun Capital Partners acquired Big 10 Tires in 2006 and entered into sale/leaseback transactions for all of the stores. The Company faced declining revenues and rising lease costs in 2007, 2008 and going into 2009. Sun Capital had to act decisively to take control of the situation. Sun Capital acquired the senior secured debt of Big 10 Tires in late 2008 to control their own destiny as equity owner. In order to sell the assets of Big 10 Tires, shop the business for sale, terminate non-performing store leases and renegotiate continuing store leases, the Company filed for Chapter 11 protection under the U. S. Bankruptcy Code in the District of Delaware on April 2, 2009. Sun Capital agreed to provide the DIP financing and serve as the stalking horse bidder for substantially all of Big 10 Tires' assets.

Solution

SSG was hired as investment banker to Big 10 Tires, both before and during the Chapter 11 bankruptcy proceeding, to shop the business for sale to find a strategic acquirer to beat Sun's offer. The professionals at SSG also provided financial advisory services to Big 10 Tires with respect to DIP financing, negotiations with all the creditor constituencies, formulating and instituting a management incentive plan and overseeing the Chapter 11 process and sale. Sun's stalking horse offer was ultimately the highest and best price for substantially all of the assets of Big 10 Tires. The sale was approved by the Bankruptcy Court and closed in June, 2009. SSG's experience identifying alternative solutions and in navigating the Chapter 11 proceeding and the sale enabled all key stakeholders to maximize recoveries while preserving the jobs of nearly all of Big 10 Tires' employees.

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