AmPac Tire Distributors Inc., the franchiser of the Tire Pros retail marketing program, is expanding into the Midwest by acquiring Latham Tire Co.-which does business as Autotire Car Care Centers-for an undisclosed amount.
The deal presents a great opportunity for Autotire to expand in the St. Louis metro area and combine its market presence with Tire Pros' marketing muscle and buying clout, according to Autotire President John Ronsick, who called it a formula ``that competitors simply cannot match.''
Mr. Ronsick said his, and AmPac's, primary goal is to double Autotire's business to 50 stores in St. Louis. ``I know that's probably a little too aggressive, but there's room for them,'' he added. ``There's plenty of room for additional stores in our area.''
``They have the same thoughts and goals as I do,'' Mr. Ronsick said of AmPac. ``We hope to work together to expand in the St. Louis market and grow the company, Autotire Tire Pros, quite a bit.''
The purchase also provides Mr. Ronsick's partners, Gene and Ray Latham, 77 and 75 years old, respectively, the option of retiring from the business at the pinnacle of their careers. The Lathams and Mr. Ronsick founded Autotire-which has grown to 23 retail stores and two commercial locations-in 1981.
The dealership expects to finish 2005 with $35 million in sales, a 6-percent rise from 2004. The acquisition is scheduled to close at the end of October.
At age 53, Mr. Ronsick isn't quite ready to retire, though he joked that after working in the tire business since age 20, he's ``due for parole.'' He told Tire Business that he sold his stock in the company but will stay on as vice president, division manager for the new Autotire Tire Pros. All of his employees also will stay, and he noted that employee benefits will be ``as good, if not better'' under AmPac.
However, even with two of its founders ready to retire, Autotire wasn't looking for a sale, Mr. Ronsick said. ``We're a very successful, profitable company. Evidently, we were on (AmPac's) radar as what they were looking for. We weren't looking because we weren't in any need, but then it just fit after we looked at it because of the exit plan for the Lathams.''
Dennis Mangola, president and CEO of Simi Valley, Calif.-based AmPac, said in a prepared statement that he was ``thoroughly impressed'' with Autotire's top-notch leadership team, noting the buyout will create ``one of the strongest network and management lineups in the industry.''
Mr. Mangola, who was traveling at Tire Business' press time, could not be reached for further comment. In the past, Mr. Mangola has said that AmPac's goal is to expand the Tire Pros retail concept nationwide and ultimately grow it to 500 franchise locations.
AmPac last broadened its distribution reach in 2000 with the acquisitions of Tasco Distributing Ltd. in Texas and Southern Rubber Co. in Alabama.
AmPac operates 15 company-owned stores and 301 franchises in 19 states, stretching from California to Florida and Georgia in the Sunbelt, and reaching as far north as Nebraska. The distributor is a wholly owned subsidiary of Japan-based Itochu Corp. The company is affiliated with American Car Care Centers (ACCC) Inc., and all of its Tire Pros franchises are ACCC locations.
Autotire also is an ACCC dealer and wholesales to six ACCC dealers in St. Louis, as well as other independent dealers and to Ford dealers. Mr. Ronsick said Autotire probably has 100 dealers within its distributorship, and the strength of the Tire Pros organization should also provide the necessary tools to expand Autotire's wholesale business.