The Eastern Shawnee Tribe of Oklahoma has acquired the wholesale tire distribution division of Burggraf Corp. from owner Terry Karnes for an undisclosed amount.
The tribe also purchased Burggraf's retail stores in Baxter Springs, Kan., and Atlanta, Texas, and leased back the Baxter Springs location to Mr. Karnes, who has retained ownership of his retail outlets in Miami, Okla., and Joplin and Carthage, Mo.
Mr. Karnes retired April 1 from his role as Quapaw-based Burggraf's CEO and president after more than 47 years with the company. He has been replaced by Jack Ross, second chief for the Eastern Shawnee Tribe and chairman of its business committee.
Mr. Karnes began his tire industry career when he was in high school as a stockman at Burggraf's Quapaw warehouse, he said in a letter addressed to Burggraf dealers announcing his retirement. He went on to a position in outside sales for the company, became part of its management team and eventually took over ownership after former owner Clarence Burggraf retired more than 10 years ago.
Ron Thrasher, COO for Burggraf, said Mr. Karnes had been looking to get out the business, and the tribe recently offered to buy the company.
Mr. Ross said the tribe has been looking at ways to expand and diversify its business ventures, which include a bank and recycling center along with several casinos. The tribe looked at 40 different companies and chose Burggraf because of its reputation and the opportunities it could provide to tribe members.
“It's local, it's been in business over 50 years and they've developed a good business model,” he said.
Mr. Ross said the tribe will use the company as a training opportunity for its members, by giving them a chance to “learn businesses from the floor up” and “allow them to develop and manage a business.”
“We're a very progressive tribe, and we spend a lot of money trying to get our tribal members to contribute to the overall social development of this country,” he said.
Messrs. Ross and Thrasher said day-to-day operations at the facility would go on as normal but expansion is very likely.
“I see us changing the way we go to market a little bit,” Mr. Thrasher said. “They've already purchased some vehicles that will allow them to do daily service to areas we haven't done.”
Mr. Ross added that the company will be involved in the slow development and growth of the existing business, and it will possibly expand its services and grow through acquisitions.
“We do have the capital to expand this business, but it's going to be a slow development,” Mr. Ross said, adding that a goal is to make Burggraf “more effective and efficient.”
Burggraf operates distribution centers in Baxter Springs, Kan., and in Atlanta, Texas, where it also will operate a retail store. The company carries a variety of passenger, light truck, heavy truck, farm and specialty tires and offers distribution services for most locations within Oklahoma, Kansas, Missouri, Arkansas, Louisiana and Texas.
Mr. Ross said Mr. Karnes' sons Dusty and Dale Karnes will handle day-to-day operations at their father's retail stores, which will continue to operate under the Burggraf name. As for Mr. Karnes, he said in his letter that dealers should be able to find him on the golf course or “out back working my dogs.”
“My life in the tire business has been a joy,” Mr. Karnes said. “I say 'thank you' to each of you in the marketplace—whether you're buying or selling tires—you made it happen for Burggraf.”