MILLWOOD, N.Y.—In one of the largest deals ever involving independent tire dealerships in the U.S., Millwood-based Mavis Tire Supply has acquired Somerset Tire Service Inc. (STS) of Bridgewater, N.J., creating a retail network comprising 324 stores in five Middle Atlantic states.
Mavis, together with its minority owner partner ONCAP Group—a Canadian investor group—is paying upwards of $48 million for STS, which operates 157 retail stores and six wholesale distribution centers.
Mavis did not disclose the ful purchase price; $48 million is ONCAP's share.
Under the Mavis banner are 167 Mavis Discount Tire and Cole Muffler stores in Connecticut, Massachusetts, New Jersey, New York and Pennsylvania.
The two dealerships were ranked sixth and seventh among U.S. independent tire retailers on Tire Business' 2014 ranking of North America's top retail dealerships.
“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 has 324 retail stores and nine wholesale locations in five states, with approximately 2,800 employees. The dealerships' annual sales were not disclosed.
Neither Mavis nor STS returned multiple calls from Tire Business seeking further comment on the deal.
The acquisition is largely complementary from a geographic point of view. A comparison of the dealerships' respective outlet lists shows a direct overlap of only about a dozen cities where both firms have outlets.
Mr. Sorbaro said the dealership expects “to grow all three areas significantly over the next several years.”
Pat Schulte, vice president of sales and marketing for STS, 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.”
Founded in 1958 in Somerset County, N.J., by Jack Apgar Jr., STS has been an employee-owned enterprise since the beginning. It became an Employee Stock Ownership Plan entity in 1984.
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, including 38 Mavis/Cole co-branded locations.
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.”
Onex paid more than $100 million (Canadian) for its interest, according to its financial filings. Among its other holdings are 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 is no stranger to growth by acquisition. Two of its larger purchases were Wholesale Tire Co. Inc. (18 stores) in 2011 and Strauss Discount Auto (21 stores) in 2013.
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