Mavis acquires STS in $48M+ deal (update)

MILLWOOD, N.Y. (Aug. 7, 2015) — In one of the largest deals ever involving independent tire dealerships, Millwood-based Mavis Discount Tire has acquired Somerset Tire Service Inc. (STS) of Bridgewater, N.J., creating a retail network comprising 324 stores throughout a five-state area.

Mavis, backed by its minority owner ONCAP Group, is paying at least $48 million for STS, which operates 157 retail stores — 95 in New Jersey, 33 in Pennsylvania and 29 in New York — and six wholesale distribution centers operating as “Banner Tire.”

ONCAP stated in a press release it's share of the purchase is valued at $48 million. Mavis has as yet not disclosed its investment in the deal. ONCAP, however, owns a 46-percent share in Mavis Tire Supply Inc.

Under the Mavis banner are 167 Mavis Discount Tire and Cole Muffler stores in Connecticut, New Jersey, New York, Massachusetts and Pennsylvania.

Mavis Discount Tire photo

Stephen and David Sorbaro, co-CEOs of Mavis Discount Tire.

The two dealerships were ranked sixth and seventh among U.S. independent tire retailers on Tire Business' 2014 ranking. STS was employee-owned.

“We've always had tremendous respect for STS,” said David Sorbaro, Mavis' co-CEO. “They've been our competitor for more than three decades and we admire their commitment to providing great customer service.”

Mr. Sorbaro, who runs Mavis with his brother Stephen, said Mavis is looking forward “to building on [STS's] great reputation to enhance a best-in-class tire retailer.”

Together, the combined business will have 324 retail stores in three states, nine wholesale locations and approximately 2,800 employees.

Mr. Sorbaro said the dealership expects “to grow all three areas significantly over the next several years.”Mavis did not say whether it would keep the STS name.

Mavis Discount Tire photo

A typical Mavis Discount Tire / Cole Muffler co-branded shop.

STS Vice President of Sales and Marketing Pat Schulte called the deal “a great opportunity for us and a natural fit for our business. We pride ourselves on providing exceptional service and superior value.

“This merger is the start of a new chapter and allows us to build the business for our employees and customers.”

Mavis has been expanding its own store network steadily over the past couple of years after selling a minority ownership stake to Toronto-based ONCAP, part of the publicly traded private equity investment firm Onex Corp., which also is based in Toronto.

Mavis, which does business as both Mavis Discount Tire and Cole Muffler, has opened more than a dozen locations in the past year, pushing its own network to 167 stores.

ONCAP/Onex bought a 46-percent share of Mavis in October 2014, citing Mavis' “strong cash flow characteristics, leading market position, experienced management team, diversity by site, customer and by supplier, in addition to a very attractive set of organic and acquisition growth opportunities.”

Somerset Tire Service photo

A typical STS Tire & Auto Center location.

Onex paid more than $100 million (Canadian) for its interest, according to its financial filings. Among its other holdings, ONCAP owns Cici's Pizza and casinos in western Canada. Onex has about $21 billion of assets under management.

Mavis Tire Supply Corp. has existed under that name since 1972, but it traces its roots to 1949 and Vic's Cycle Shop, a bicycle repair business established by Victor Sorbaro in Mt. Vernon, N.Y. That morphed into “Vic the Tire King” in 1965 as the business evolved toward tire repair and then new tire sales.

Expansion to multiple stores followed, and in 1972 — striving for a more professional image — Vic and Marion Sorbaro changed the name to Mavis Tire Supply. The name is derived from the first two letters of Marion and Victor and then the “s” from Sorbaro.

Mavis still operates the original 7,000-sq.-ft. location in Mt. Vernon.

STS was founded in 1958 in Somerset County, N.J.This is the second significant acquisition in the New York market in the past month. Earlier Monro Muffler Brake Inc. bought 27 Kost Tire stores in New York and Pennsylvania.

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To reach this reporter: [email protected]; 330-865-6145; Twitter: @reifenmensch

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