Overview
Across more than 40 years, Colony Tire Corporation (Colony Tire) has grown from a single service station in North Carolina to a leading provider of tires and automotive services throughout the South Atlantic region, operating 43 locations in the Carolinas, Virginia and Tennessee. The company offers a wide range of services, from tire sales and state inspections to wheel alignments and general maintenance assistance, for retail and commercial customers. Colony Tire’s leadership credits company growth and success to its legacy of family-business values and its skilled workforce that is dedicated to customer satisfaction.
Situation
Colony Tire’s owners sought a business succession strategy that would reward employees with the benefits of future growth, maintain the company’s community-oriented culture, allow for an ownership exit strategy and create a liquidity event for key stakeholders. A comprehensive evaluation of various transition strategies revealed that a 100% employee stock ownership plan (ESOP) naturally fit the succession and legacy goals of the company.
Solution
Colony Tire engaged SES ESOP Strategies (SES) along with its affiliated law firm, Stevens & Lee, to structure the new ESOP plan. SES conducted financial due diligence, modelled the ESOP plan structure and transaction, executed a capital debt raise to assist with financing and negotiated with lenders. Attorneys from Stevens & Lee helped to prepare the ESOP transaction, related documents and establish a Stock Appreciation Rights Plan that would reward future company management and employees.
“As our business evolves, we wanted to ensure that the dedication of our workforce is rewarded and our community-focused legacy is furthered,” said Scott Creighton, President of Colony Tire. “SES and Stevens & Lee delivered the high caliber client service we value, guiding the financing and technical details of the transaction and positioning our employees to benefit from the future success of the company.”
For more information on this transaction, please contact Ed Renenger, President and CEO, at 610.478.2238, Mark Russell, Head of Finance, at 817.566.1013, Ethan Stambler, Sr. Vice President, at 919.200.0912 or Vince Capone, Sr. Vice President, at 215.508.7716.