Monro Muffler Brake Inc. is adding 19 tire stores to its Mr. Tire chain with the acquisition of Valley Forge Tire & Auto Centers of King of Prussia, Pa., and the pending buyout of Craven Tire & Auto of Fairfax, Va.
Monro is acquiring both family-owned operations for a total of about $16.7 million. The two chains generated total annual sales of about $22 million last year, according to Monro, which said it intends to retain the store employees at all the locations.
``These two transactions, which together generate annual sales equal to approximately 5 percent of Monro's total fiscal year 2007 sales, not only fit with our stated strategy of achieving growth through reasonably priced acquisitions, but also serve to significantly expand our tire store footprint,'' said John Van Heel, Monro's executive vice president and chief administrative officer.
Valley Forge Tire has eight locations in the Philadelphia area, and one each in Delaware and New Jersey, along with a new store it was building in Woodbury, N.J., that is set to open as a Mr. Tire location in August. Monro's prior presence in the Philadelphia market was its 26 Monro Muffler Brake & Service stores.
Craven Tire has eight stores in the northern Virginia market that will join the single Mr. Tire store that has been operating in Arlington, Va., for several years.
``It gives us the entry we needed in that market area,'' said Joseph Tomarchio Jr., Monro's executive vice president of store operations. ``We're looking for additional acquisitions in both markets.''
Acquiring existing tire dealerships has been the long-stated mode of growth for Monro, which has been bolstering its Mr. Tire chain during the past few years as a complementary platform with its name brand undercar service shops. Monro has been offering buyouts of independent tire chains where the owners don't have a succession plan or want to exit the business.
``We are the exit strategy,'' Mr. Tomarchio stated. ``This industry needs to consolidate, and we're the perfect company to do that.''
Prior to the recent acquisitions, Monro operated 705 locations that included 88 Mr. Tire stores and 27 Tread Quarters Discount Tire outlets along with its Monro undercar service shops in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware, Maine and Michigan.
``The timing was right. It's not what I wanted to do or planned to do. It was in the best interest of my family,'' said Steve Craven on his decision to sell Craven Tire. He said Monro had been ``knocking on his door'' for 10 years about selling the company his father founded in 1960. He said his decision to sell was based on several factors, including the lack of a succession plan, pending lease issues and the ``fair offer'' from Monro.
At age 54, he said he doesn't want to retire from the tire industry, and he intends to continue serving on the Tire Industry Association and the Virginia Automotive Association boards of directors, as well as spend more time working with charities, including Angel Flight, his church and other ministries. ``That's one thing that was very attractive to me,'' he said of his decision to sell the dealership.
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By the numbers
Here's a look at Monro's recent acquisitions:
2002-Kimmel Tire & Auto Centers (dba Tread Quarters Discount Tire), 34 stores, Maryland/Virginia
2003-Frasier Tire Service, 10 stores, South Carolina
2004-Donald B Rice Co., five retail stores, Maryland
Mr. Tire (ownership divided between Atlantic Automotive Corp. and Henderson Holdings Inc.), 36 stores, Maryland
2006-ProCare Automotive Service Solutions, 31 stores, Ohio/Pennsylvania