Southern Tire Mart L.L.C. acquired the assets of Tulsa, Okla.-based Mileage Masters Inc. late last year, growing its footprint throughout Oklahoma and Arkansas.
The deal, for an undisclosed amount, expanded Southern Tire Mart's network of commercial stores by 11 in those states and added three Bandag retread plants. The Mileage Masters outlets began flying the Southern Tire Mart banner Nov. 1, said Keven Haddox, who has been managing the integration of Mileage Masters into Columbia-based Southern Tire Mart.
In Oklahoma, Southern Tire Mart acquired outlets in Tulsa, Oklahoma City, Ardmore and Enid; in Arkansas, the company gained stores in Springdale, Fort Smith, Little Rock, Batesville and Searcy. The retread plants are located in Oklahoma City, Tulsa and Searcy.
In Springdale, Fort Smith and Little Rock, Southern Tire Mart had operations that it consolidated with the new stores from Mileage Masters, Mr. Haddox said.
Mr. Haddox said Mike Hamsher, former president of Mileage Masters, was looking for an opportunity to sell the dealership, and although Southern Tire Mart already serviced that area, the buyout seemed to make sense for both parties.
We had joint customers that either worked in those areas or were headquartered up there, or had locations in our spot or vice versa, so it was just a good fit, Mr. Haddox said. And it was also a good fit with Mike Hamsher and his crew with us.
Mr. Hamsher, 52, remained with Southern Tire Mart to manage the Tulsa store. He told Tire Business he thought the timing was right to sell based on the offer and the direction he saw the business heading.
I just felt like we were a small guy with not a lot of growth opportunities.
Mr. Hamsher founded Mileage Masters in 1984 with help from the former Bandag Inc., for which he had worked as a salesman. He said he started with one store and one worker, and 24 years later his company had grown to 220 employees, $50 million in annual sales and was retreading about 500 medium truck tires a day.
Southern Tire Mart is owned and operated by Tom and Jim Duff, who re-established the dealership in 2003 after buying back assets they had sold to Bandag's Tire Distribution Systems commercial tire subsidiary in 1997. The dealership posted 2008 sales of $420 million with 52 commercial stores, 17 retread plants and one retail store, making it the No. 1 independent commercial tire dealership in the U.S. and second only to Canada's Kal Tire in North America.
Southern Tire Mart also is North America's largest independent retreader, producing 2,740 units a day.
Mr. Haddox explained that Southern Tire Mart tries to run a flat organization that doesn't include departments or titles. Hence, although he was responsible for the Mileage Masters transition, Mr. Haddox described his duties after the deal closed as whatever I need to be. We all do what's necessary.
For 2009, Mr. Haddox noted that Southern Tire Mart is not hunkering down but plans to remain aggressive and not participate in the recession. He said business is up so far with a slight increase in same-store sales, but he declined to elaborate.
We are trying to do the right things that are prudent for our business, he said. We're always looking for new opportunities with customers and businesses that come around.