PARADISE ISLAND, Bahamas (Jan. 14, 2000) —Look out Discount Tire Co. Inc., Morgan Tire & Auto Inc. and Big O Tires Inc. There´s a newcomer with big plans for a nationwide network of 400 to 500 tire stores.
Am-Pac Tire Dist. Inc. of Simi Valley, Calif., has announced a merger with Southern Rubber Co. of Birmingham, Ala.
The transaction involved an exchange of stock, but no specifics were disclosed.
The acquisition, retroactive to Jan. 1 pending final legal clearances, gives Am-Pac—franchisor of the Tire Pros retail chain—a total of 105 retail outlets. Am-Pac also has its first holdings east of the Mississippi River, providing a significant foothold in the southeastern U.S.
"We´re looking to achieve a number of 400 to 500 Tire Pros as quickly as we can," said Dennis Mangola, president and CEO of Am-Pac, without providing a specific schedule. "However, we´re not going to be reckless about it."
Mr. Mangola spoke with Tire Business while attending Michelin Americas Small Tires´ annual dealer meeting at Paradise Island.
Am-Pac is a wholly owned subsidiary of Tokyo-based Itochu Corp., an international trading company with annual sales of more than $115 billion. It was established when Itochu purchased Aspen Enterprises Inc. and its Tire Pros assets in January 1999.
Am-Pac oversees 99 Tire Pros locations in addition to a wholesale operation and posts annual sales of about $95 million. Southern—with about $60 million in annual sales—includes six retail stores, four warehouses, two commercial outlets and an Oliver retread plant. All the facilities are located in Alabama.
Mr. Mangola said Am-Pac will look at additional potential acquisition targets "that are structured pretty similarly to Am-Pac and Tire Pros."
Both Am-Pac and Southern are affiliated with Memphis, Tenn.-based American Car Care Centers Inc., which is how the deal was struck.
Mr. Mangola, who chairs ACCC´s products committee, said he met Richard Abernethy, CEO of Southern, when Mr. Abernethy was chairman of ACCC and both were involved in strategic planning.
"Richard and his team (at Southern Tire) are excellent marketers, and they´re very much concerned about how to go to market in the future," Mr. Mangola said, "That´s one of
the biggest reasons they teamed up with us."
Mr. Abernethy and his brother, John, have signed long-term contracts with Am-Pac, Mr. Mangola said, and they will continue at Southern as the "senior management team running that operation."
For the time being, Southern´s retail outlets will continue to do business as Southern Rubber Co.Mr. Mangola said. Eventually, they will be named Tire Pros, but Mr. Mangola said he´s more interested at present in how to integrate these two companies and take advantage of any synergies.
"I think, when it´s appropriate, we´re looking to roll out the name `Tire Pros´ everywhere," he said.
Mr. Mangola also sought to assuage any fears among Southern´s employees and customers.
"We want them to stay on board," he said. "When we make an acquisition like this, we´re not going to bring in a team of people or look to synergize the company to a degree where we don´t need any of the management team."
Mr. Mangola said Am-Pac is looking into additional expansion in the Southeast and other areas. "We have targeted several distributors we´ve looked at," he said, "that we feel are structured very much like ours."
The expansion will be methodical and strategically done, he said. "We´re not into consolidation for the sake of consolidation and getting numbers for the sake of numbers."