MINNEAPOLIS-A farm supply cooperative has announced it will acquire on June 1 the S*&*M Co., a Minneapolis-based tire distributor which administers the ``Mr. Tire'' affiliate program in the region. Both companies said the acquisition is a ``natural fit''-allowing Universal Cooperatives Inc. of Minneapolis to penetrate S & M's metropolitan markets and providing capital for the expansion of the Mr. Tire dealer marketing program.
With shrinking margins in the tire market, S & M President John Sieff said the sale of the family-owned, 74-year-old distributorship avoids ``duplication of effort'' in administrative services and will bolster its marketing program and provide lower costs to dealers due to Universal's large buying power.
Merging the two operations also will provide dealers with a larger tire and battery inventory and offer a variety of automotive accessories, he said.
S & M will operate as a division of Universal and continue to serve its 700-dealer network from its two warehouses, in Des Moines, Iowa, and in Minneapolis, in addition to Universal's central tire distribution facility in Albert Lea, Minn. S & M currently distributes to dealers in Minnesota, North Dakota, South Dakota, Iowa and upper Michigan.
Under Universal, S & M's market will expand into Kansas and Nebraska, Mr. Sieff said.
Universal Cooperatives, founded in 1939, describes itself as a diversified interregional farm supply cooperative which purchases, manufactures and distributes a variety of farm supply products, including farm and truck tires, batteries and automotive lubricants. Universal is owned by 21 regional cooperative organizations located in the U.S. and Canada.
The cooperative distributes its CO-OP brand farm tire-and the Mark series of passenger tires-to its co-op accounts. Universal President Patrick Finley said the firm doesn't plan to cross-market its private label lines with S & M's offering of Summit, Remington and Delta private brand tires. Both firms are distributor members of Summit Tire & Battery Inc.
Truck and farm tires dominate Universal's tire sales while S & M focuses on the marketing of passenger and light truck tires to independent dealers. Universal would not disclose its tires sales, but Mr. Finley said the acquisition will boost its tire revenues about 15 percent. He declined to comment on plans for other tire business acquisitions.
The Mr. Tire program, which Mr. Sieff said has grown fourfold in the last three years, includes four company-owned outlets and 51 affiliated dealerships. Under new ownership, Mr. Sieff expects the program to add two to four more company stores this year and predicts the affiliate roster will grow ``substantially.''
The Mr. Tire program provides advertising support and name recognition with affiliate signs and materials. ``It's the only program short of a franchise for independent dealers in this area,'' Mr. Sieff said. The acquisition, he added, will ``make the dealer program substantially stronger.''
While primarily a private brand distributor, S & M also carries General, Michelin and BFGoodrich lines.
After the acquisition, Mr. Sieff, a 45-year tire business veteran, will step down as president of S & M, turning the helm over to his son, S & M Vice President Peter Sieff.