CLEARWATER, Fla.—In a sense, Morgan Tire & Auto Inc. Chairman and CEO Larry C. Morgan is coming home. On March 31, Morgan Tire purchased Gaithersburg, Md.-based Performance Discount Tire Inc., which has 13 stores in the Washington, D.C., metropolitan area.
The Clearwater-based mega-dealership also is continuing its expansion in Georgia, with the purchase of Macon-based H&R Auto Inc., which owns seven Mike Houston's Auto Care and Tire Factory Outlets in Macon, Warner Robins, and Perry, Ga. That deal also closed March 31.
Details of the purchases were not disclosed.
The Performance Discount Tire outlets will be Morgan Tire's first in Maryland and Virginia.
"I know that market very well," Mr. Morgan said. "I spent 18 years there while I was at Merchant's (Inc.), so I'm familiar with it." Mr. Morgan was president of Manassas, Va.-based Merchant's before moving to Florida in 1991.
Mr. Morgan said the Performance locations "most likely" will be renamed Olson Tire and Total Car Care centers. The co-owners of the 27-year-old chain, William and Charles Becker, will be leaving the tire business, Mr. Morgan said, but the rest of the dealership's employees will be retained.
Performance, a member of Michelin Americas Small Tire's Alliance program, posted sales of $10.3 million in 1998. Michelin dropped Morgan Tire from the Alliance program just over a year ago, so the brand mix at Performance is likely to change.
H&R President Wayne Russell and the remainder of Mike Houston's employees will be retained, Mr. Morgan said, with Mr. Russell's specific duties still to be determined.
Combined sales for the seven Mike Houston's stores were not disclosed, but Mr. Morgan said he hopes to strengthen them through marketing activity.
The Mike Houston's locations will be converted to Olson Tire Total Car Care outlets "fairly soon," he added.
Morgan Tire now owns 34 locations throughout Georgia, including eight American Discount Tire locations between Atlanta and Athens, Ga., that Morgan Tire purchased in October. Regarding additional locations in Georgia, Mr. Morgan said there are "eight or nine under construction and another couple of dozen that are committed for."
Morgan Tire plans to have 100 Georgia locations within the next few years—including more than 40 stores in the Atlanta area, he said.
The Florida-based firm also is planning further expansion in the metropolitan Washington market. "It's a big market," Mr. Morgan said, "so it's going to require a lot of stores."
Asked whether any tire manufacturers were providing financial assistance with the purchases, Mr. Morgan said, "No, I wish there was, but there isn't. I just keep making money and borrowing money," he said.
With these acquisitions, Morgan Tire grows to 350 outlets and solidifies its position as the fourth-largest retail dealership in North America with retail sales of nearly $400 million in 1999.