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Monro to buy Curry's Auto

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ROCHESTER, N.Y.—Monro Muffler Brake Inc. is revving up its acquisition engine again, sealing a deal to buy Curry's Auto Service Inc.'s 10 stores in the Washington, D.C., metro area and entering takeover talks with seven more retail tire and auto service retailers ranging in size from five to 40 stores.

Monro CEO John Van Heel said Monro is back in the acquisition market after taking a six-month break to integrate its fiscal 2013 acquisitions—nearly 100 stores in five separate transactions.

“Based on the current transaction, the current macro environment and our existing (non-disclosure agreements), we think the acquisition environment can heat up further in the second half of the year,” Mr. Van Heel told financial analysts in a conference call covering Monro's first quarter financial report.

“We have plenty of liquidity combined with strong cash flow to complete these deals and remain very disciplined on the prices we pay with 7 to 7.5 times EBITDA (earnings before interest, taxes, depreciation and amortization), or about 80 percent of sales being our key metric,” he said.

“Importantly, we continue to compete only with the sellers' expectations in these deals.”

Five of the possible acquisitions the company is contemplating are within Monro's existing market footprint, he said, with the others in adjacent markets.

Commenting on the Curry's deal, Mr. Van Heel said the business' sales mix heavily skewed to the auto service side does not signal a shift away from the company's acquisition strategy.

“Our multi-branding strategy allows us to have that kind of flexibility as we approach acquisition candidates,...” he said, adding that, in general, four out of five businesses Monro considers for acquisition are predominantly tire retailers.

Monro did not disclose details of the purchase agreement but said the Curry's Auto stores generate about $18 million in sales annually, with approximately 80 percent coming from auto service and 20 percent tires.

Monro said it plans to retain all store-level employees and the closing is expected to occur in mid-August. It will rebadge the stores as Curry's/Mr. Tire. The deal will boost Monro's presence in the D.C. area to roughly 50 stores, including 35 Mr. Tire locations.

Curry's Auto Service is owned by Matt and Judy Curry, who established the business in 1998 and opened their 10th location earlier this year, in Leesburg, Va.

With the opening of that shop, Curry's Auto Service expanded to nine locations in northern Virginia—Alexandria, Arlington, Chantilly, Dulles, Fairfax City, Falls Church, Gainesville, Vienna and Leesburg—to go with one in Gaithersburg, Md.

The Gainsville-based dealership is affiliated with American Tire Distributors Holdings Inc.'s Tire Pros marketing group and earlier this year was been named to the “2013 Future 50” list—the fastest growing companies in the Washington, D.C., area—by Washington Smart CEO Magazine.

The Currys had not commented on their business plans post-sale by the deadline for this issue.

The acquisition will push Monro's store network to 945, including nearly 400 that are part of the firm's tire-centric store network. That total makes Monro the third largest “independent” tire retailer in the U.S.

Monro's acquisitions in the past year included Ken Towery's Tire & Auto Service of Louisville, Ky. (27 stores); Enger Auto Service & Tires of Mentor, Ohio (11 stores); Tire King Complete Car Care of Durham, N.C. (nine stores); Tire Barn Warehouse of Anderson, Ind. (31 stores); and 17 Tuffy Muffler/Car-X locations in Wisconsin and South Carolina.

To reach this reporter:; 330-865-6145.
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