Monro has more acquisitions pending

ROCHESTER, N.Y. (Oct. 24, 2014) — Don't expect Monro Muffler Brake Inc.'s acquisition strategy to slow down anytime soon: The Rochester-based retailer has a deal pending to buy a nine-store dealership before year-end and 10 more non-disclosure agreements signed with potential acquisition targets.

Monro disclosed this week it has acquired Wood & Fullerton Inc., a nine-store predominantly Goodyear tire retailer in suburban Atlanta and closed its earlier deal for 35 Tire Choice stores in south Florida.

The retailer remains  “very optimistic about our opportunities for additional deals in the near future and we expect fiscal 2015 to be a significant year for acquisitions,” Monro President and CEO John Van Heel said during the firm's second quarter earnings conference call with financial analysts.

The pending agreement is for a nine-store dealership within its existing footprint with approximately $10 million in annual sales, Monro said.

“A difficult operating environment will allow us to complete even more deals and further accelerate our top line growth. This represents our key hedge in our business model,” he said.

The Wood & Fullerton and Tire Choice acquisitions, in Georgia and Florida, respectively, “will balance our exposure to northern, northeastern and central markets providing many years of profitable expansion,” Mr. Van Heel said, adding that Monro feels acquisitions made in fiscal 2015 will exceed the firm's 10-percent annualized sales growth target outlined in Monro's five-year plan.

“In fact,” he said, “the acquisitions we have completed to date in fiscal 2015 already represent 9-percent annualized sales growth this fiscal year and continue to outperform plan. We do, however, expect slight dilution in the third and fourth quarters from these acquisitions.”