CLEARWATER, Fla.—Don Olson Tire & Auto Centers will make a giant leap toward its goal of dominating the Florida market with the planned acquisition of Automotive Industries Inc.'s 28 retail outlets. On May 30, the dealership expects to close a deal to buy Automotive Industries (AI) from Jacksonville, Fla.-based Acorn Venture Capital Corp. for an undisclosed amount.
AI operates 18 Jim Martin Tire locations, primarily in Jacksonville; four Mott Tire stores in Gainesville and Ocala, Fla.; and six Wall Tire locations, primarily in Augusta, Ga.
With the acquisition, Clearwater-based Olson Tire will have 128 outlets, including those under construction. The Wall Tire stores will expand Olson's presence outside Florida for the first time, into markets in Savannah and Augusta, Ga., and North Augusta, S.C.
Last year, TIRE BUSINESS ranked Don Olson Tire as the ninth-largest independent tire retailer in North America, based on 86 company-owned stores. The AI acquisition would elevate the dealership's ranking to 7th, based on 1996 data.
Larry Morgan, chairman and CEO of Olson Tire, said the transaction developed after he expressed to AI President and CEO Orland Wolford his interest in entering the Jacksonville market, the last major Florida market untapped by his dealership.
Acorn Venture Capital, a business development company, had bought AI from General Tire in 1993 for $2.4 million. In 1995, TIRE BUSINESS ranked AI among North America's largest independent tire dealerships with 57 retail outlets. But early last year the dealership's financially troubled ServiceMax Tire & Auto Centers operation in Michigan, which had once had 28 outlets, went out of business.
For the first quarter, ended March 31, AI reported a net loss of $62,158 on sales of $4.56 million.
Acorn CEO Stephen Ollendorff said stockholders wanted Acorn to concentrate on its electronics business. ``(AI) was better off being part of a strategic chain,'' he said.
AI's Mr. Wolford will join Olson Tire as regional vice president, leading the AI group as well as selected northern region stores. AI Senior Vice President and CFO Bill King will become CFO of Olson's commercial truck tire division.
The acquired dealerships will retain their individual names for a while, but the interior of the stores will be converted immediately to an Olson style of operation, Mr. Morgan said.
The AI operations are similar to Olson's, Mr. Morgan said. The conversion will include adding service equipment and training the personnel to do more sophisticated air conditioning service, underhood electrical analysis and tune-ups. The stores will also be given ``facelifts'' and remodeled with Olson signs and point-of-sale materials inside the stores.
Only four AI outlets overlap Olson locations, in Gainesville and Ocala, but those will continue to operate under their current names, Mr. Morgan said.
Initially, the dealership will notify existing AI customers about the change. Later, a public campaign will be launched, with a change in outside store signs, Mr. Morgan said.
The planned acquisition edges Olson Tire closer to its goal of dominating the Florida market—Mr. Morgan said his dealership will need to open about 50 more stores to saturate the state. ``We have an aggressive new-store construction plan in place,'' Mr. Morgan said, noting that seven stores currently are under construction, with nine more due to break ground soon.
The deal also gives Olson Tire a presence in two other states. Mr. Morgan said he has not totally defined the dealership's future direction, but he will retain the out-of-state locations.