AKRON — The wave of mergers and acquisitions (M&As) that engulfed the industry in 2022 has morphed into a tsunami with the May 22 disclosure that TBC Corp. is selling its retail tire holdings, 595 stores in all, to Mavis Tire Express Services Corp.
The TBC-Mavis deal, expected to close within a few weeks, will rank as the largest transaction in the retail tire business in the U.S. in the past 25-plus years, topped only by Penske Corp.'s takeover of 860 Kmart auto centers in 1995.
The deal covers 203 Tire Kingdom stores in Florida and 391 NTB National Tire & Battery stores in the mid-Atlantic, Midwest and South, including Texas, expanding Mavis' retail holdings to nearly 2,000 stores across 25-plus states.
It also marks the fifth major acquisition in the past eight years for Millwood, N.Y.-based Mavis Tire Express, including Mavis' purchase in 2020 of 112 NTB stores in the greater Atlanta, Boston, Chicago and Philadelphia metro areas.
Even discounting the TBC-Mavis deal, 2023 was shaping up to be another record or near-recod year for M&A.
Prior to the disclosure of the Mavis-TBC deal, Tire Business had tracked 24 transactions involving 56 tire retail/auto repair shops, 21 commercial vehicle service locations, four retread plants, 20-plus wholesale distribution centers, 250-plus truck stops and a fleet of dozens of mobile repair vans.
That compares with 81 separate transactions tracked in 2022, covering 248 retail tire/auto repair stores, 97 commercial vehicle service outlets, 21 retread plants, and 39 wholesale D/Cs.
Among the larger deals transacted so far this year are:
- Pomp's Tire Service Inc.'s purchase of Royal Tire Inc. of Saint Cloud, Minn., which comprises 17 predominantly commercial service-oriented points of sale in Minnesota and South Dakota, three retread plants and roughly 220 employees; the deal expands Pomp's Tire's servicing footprint to nearly 190 locations throughout 17 states.
- Southern Tire Mart L.L.C.'s takeover of the assets of Friend Tire Co., the Monett, Mo.-based wholesale arm of Yokohama Corp. of North America that operates nine distribution centers around the country and has reported annual sales of over $150 million in the past few years; the deal makes Southern Tire Mart — already the largest commercial tire dealership and retreader in North America — a notable player in the wholesale business as well.
- Belle Tire's acquisition of Tireman Auto Service Centers of Toledo, Ohio, expanding its reach into northwest Ohio, where Tireman has 15 locations in addition to three in Michigan; the deal expands Belle Tire's network of retail stores to 168 in four states — Indiana, Illinois, Michigan and Ohio — and will help grow Belle Tire's annual revenue well into the $600 million range.
- MFA Oil Inc.'s takeover of 13 Big O Tires outlets in the greater Kansas City area from TBC Corp., which had been operating them under the corporate umbrella for the past two-plus years; the deal builds MFA Oil's network of Big O stores to 35 in a three-state area — Arkansas, Kansas and Missouri — making it the second-largest Big O Tires franchisee.
There were two acquisitions involving publicly traded companies: BP North America Inc.'s $1.3 billion takeover of TravelCenters of America Inc.; and AutoNation Inc.'s $190 million purchase of RepairSmith Inc.
In contrast to 2022, when a measurable share of M&A activity involved private-equity-backed companies, so far in 2023 the bulk of the activity has been more "old school" — carried out by private enterprises using their own resources.
Some observers chalk this up to the rising interest rates, which are making potential acquistions costlier.
At the same time, though, Sterling Group, a Dallas-based private-equity firm with nearly $6 billion in assets, is planning to build its own acquisition-driven retail tire and auto service network under the Premier Tire & Service brand.
Sterling Group has recruited former Big O Tires and Full Speed Automotive executive John Adams to be a central figure in the initiative, which has stated its strategy as: Acquire independent tire and retail service locations with customer-focused service models in various markets across the country.
To date the company hasn't disclosed any acquisitions and hasn't set up a website under the Premier Tire name.
One enterprise that's bound to keep popping up for those tracking M&A activity is Dytech Auto Group Inc. — d.b.a. GreatWater 360 Auto Care — the Hudsonville, Mich.-based enterprise that has been on an acquisition spree the last couple of years, taking over 95-plus independent auto service locations in the Midwest, including eight so far in 2023.