CINCINNATI—Bob Sumerel Tire Co. is selling its retail tire business, comprising 30 outlets in Ohio, Indiana and Kentucky, to AAA Allied Group Inc., a Cincinnati-based AAA-affiliated travel services company that will continue to use the Bob Sumerel Tire & Service name.
Financial aspects of the deal, scheduled to close by Nov. 1, were not disclosed, but company founder and chairman Bob Sumerel called it “fair market value.”
Buying Bob Sumerel Tire & Service will continue AAA Allied's focus on strengthening its core automotive service offerings, the firm said, and is considered in line with its strategy to expand automotive services to the garage from its more familiar roadside emergency response service.
The deal will take Bob Sumerel Tire—which started in 1968 with one retail store in Cincinnati—out of the retail business while providing fresh capital to expand its commercial business, which covers 12 commercial tire outlets in Ohio, Kentucky and Pennsylvania and six Bandag retread plants. Of the dozen sites, three are combined commercial/retail outlets, one will continue as a commercial site and two will transition solely to retail and be operated by AAA.
AAA Allied values the strength of the Bob Sumerel Tire name and plans to expand the chain to additional markets in the future, according to James Pease III, chairman and CEO of the Cincinnati-based company.
Mr. Pease declined to comment on the specifics of growth plans, but AAA Allied services provides travel, insurance, automotive and financial services to more than 1.4 million AAA members in seven states—Connecticut, Indiana, Kansas, Kentucky, Ohio, Virginia and West Virginia.
“AAA and Bob Sumerel have long-standing traditions of offering world-class, reliable automotive services,” Mr. Pease said. “Sumerel's operations and culture align perfectly with AAA, affording us the opportunity to expand services, value and benefits for members.”
Bob Sumerel Tire's retail outlets have been AAA-approved service facilities for more than a decade, Mr. Pease said.
Craig Sumerel, president of Sumerel Tire's retail division, will continue to lead the business under AAA Allied's ownership.
Erlanger, Ky.-based Bob Sumerel Tire plans to use some of the proceeds of the sale to expand its commercial business, according to Todd Sumerel, president of commercial, who said the dealership “plans to get aggressive in the next few years.”
The company expanded its commercial reach into eastern Pennsylvania two years ago, filling a void in the Bandag service network created when Valley Tire Co. switched its retread business to Michelin Retread Technologies.
Most of Bob Sumerel's retail locations are in Ohio, primarily in the Cincinnati and Columbus metropolitan areas; the Cincinnati-area network includes three outlets in Kentucky and one in Indiana. The retail business, which has 230 employees, generates $30 million to $40 million in sales annually, Craig Sumerel said.
“This is a very exciting opportunity that highlights the strategic synergies between AAA and Bob Sumerel Tire & Service,” said Bob Sumerel, founder and chairman of Bob Sumerel Tire Co., in a prepared statement.
“The combination of these two trusted and reputable brands will enhance the value of services available to existing and new Bob Sumerel customers and AAA members to provide growth opportunities for both businesses,” he said.
Mr. Sumerel said AAA approached him about a year ago and negotiations had continued since. He indicated the key for him was the satisfaction of knowing the business' employees would be looked after.
Sumerel Tire offers a complete range of automotive maintenance and repair services with ASE-certified mechanics along with a dozen name-brand tire lines.
The Bob Sumerel stores will continue to service all customers, a AAA spokeswoman said, but the motorist organization's members will receive AAA discounts.
AAA Allied, one of about 40 regional clubs that make up the national AAA, also owns some travel agencies in the markets it services.
Moving into a bricks-and-mortar business is not without precedent in the AAA network, Mr. Pease said, pointing to AAA in the Carolinas, which has built a network of 26 auto repair outlets, and others that have started doing the same.
AAA Allied will look at adding AAA travel services to selected Bob Sumerel Tire locations, where such business collaborations make sense, Mr. Pease said.
Bob Sumerel opened his first retail tire store in 1968 in Cincinnati, with a plan to lease vacant gas stations in high traffic areas and refurbish them into retail tire stores. He expanded into the commercial tire business in 1972 with his first commercial outlet and Bandag retread plant.