M&A: The name of the game

Mergers and acquisitions played a pivotal role in changing the retail, wholesale and commercial tire landscape in the past 12 months, and will continue to do so into 2016 as Bridgestone Americas and Icahn Enterprises L.P. parry and thrust over control of Pep Boys - Manny, Moe & Jack's 800-plus locations.

Arguably the No. 1 deal of the year was Mavis Discount Tire's purchase of Somerset Tire Service Inc. (STS) of Bridgewater, N.J., creating a retail network comprising 324 stores throughout a five-state area along the Eastern Seaboard.

Backed by its minority owner ONCAP Group of Canada, Millwood, N.Y.-based Mavis paid at least $48 million for STS, which operated 157 retail stores—95 in New Jersey, 33 in Pennsylvania and 29 in New York—and six wholesale distribution centers operating as “Banner Tire.” Mavis' holdings at the time comprised 167 Mavis Discount Tire and Cole Muffler stores in Connecticut, New Jersey, New York, Massachusetts and Pennsylvania. Toronto-based ONCAP owns a 46-percent share in Mavis Tire Supply Inc.

Mavis supplemented the STS acquisition with a dozen store openings of its own, and Mavis co-owner David Sorbaro said Mavis will continue to use the STS brand name alongside its own brand names due to the “significant brand loyalty” the brands have in their respective marketplaces.

A Tire Business analysis of the firms' footprints disclosed only a dozen or so locations where the firms have stores in overlapping areas.

Perennial M&A king Monro Muffler Brake Inc. acquired 48 retail stores in four separate deals—highlighted by the purchase of 27 Kost Tire & Auto Care locations in central New York and Pennsylvania in mid August—and added franchising to its portfolio with the purchase of the Car-X Tire & Auto retail auto service brand.

The Kost Tire locations were rebranded as Mr. Tire stores, allowing the company to fill in existing markets where it already operates Monro Brake & Tire locations, Monro said.

The other deals were for four stores in Massachusetts—Windsor Tire in Norwood and Stoughton, and Mass Tire in Brockton and Canton, Mass—eight Martino Tire and nine gold coast Tire & Auto retail tire and auto repair stores in South Florida.

The Massachusetts stores were rebranded as Monro Muffler Brake & Service outlets, while the Florida stores were converted to Monro's Tire Choice & Total Car Care brand.

In May, Monro paid up to $15 million for the Car-X Tire & Auto business—comprising 146 franchised locations in 10 states—from Tuffy Associates Corp.

The Car-X stores are owned and operated by 32 independent Car-X franchisees, Monro said. Of those, three—Gorrepati Enterprises Inc. in Cincinnati, BREX Inc. in St. Louis, and NONA Inc. in Champaign, Ill.—are ranked among the nation's top 100 tire and auto service retailers by Tire Business.

• TBC Corp.'s Big O Tires L.L.C. unit played a role in two big deals.

In July MFA Oil Co. of Missouri purchased Big O Tires' interest in the BORE/MPC L.L.C. venture the companies formed seven years ago. That venture now operates 14 Big O Tires stores in Missouri and Arkansas, with plans for more.

In October, Big O Tires franchisees Golden West Tire Centers/Southland Tire acquired nine Big O stores in Colorado from longtime Big O franchisees Kevin and Valerie Brooks, expanding their combined network to 26 stores.

The deal made Golden West Tire/Southland Tire—the two businesses have cross ownership and operate as a single entity—the largest Big O franchisee. Sale terms weren't disclosed.

• Raben Holdings L.L.C. made two acquisitions: the inventory and other non-real-estate assets of Shelby's Wheel & Tires Inc. in Paducah, Ky., and the assets of Coogle Tire Service in Otterbein, Ind.

These deals “reinforce Raben Tire's commitment to extend the reach of our network to better serve customers across the Midwest,” Raben Tire Co. President Eric Glover said. Raben sold an undisclosed share in itself in late 2014 to Palladium Equity Partners L.L.C. of New York, which is on record as supporting Raben's efforts to grow.

• Jack Williams Tire Co. Inc. acquired two retail competitors within its distribution footprint—Lancaster, Pa.-based Philip Lebzelter & Son Co. and Pittston Tire & Auto Service of Pittston, Pa.

• Express Oil Change & Tire Service added 23 retail tire and auto service locations to its network in three separate acquisitions throughout the South.

The dealerships acquired—Savannah Tire Brake & Alignment Centers, Trax Tires and Upton Tire—were all affiliated with American Tire Distributors Holdings Inc.'s Tire Pros program and continue to do business under their respective names.

• U.S. AutoForce acquired Miami-based distributor South Dade Automotive Inc., expanding its reach into the Florida and export markets.

• K&M Tire Inc. purchased the assets of Kelle Oil Co.'s wholesale tire division located in Braman, Okla.

• American Tire Distributors Holdings Inc. (ATD) acquired most of the assets of Albert Tire L.L.C., a West Deptford, N.J.-based wholesaler, but closed Albert's four distribution centers shortly after closing the deal in July.

ATD itself underwent an ownership change, with a fund managed by the Private Equity Group of Ares Management L.P. buying a 48.4-percent interest in ATD from TPG Capital L.P., making the two investor groups equal owners of the mega-wholesaler.

• TBC Corp. acquired the tire inventory of Del-Nat Tire Corp. along with certain other assets, including the ownership of all Del-Nat brands and trademarks, in January, following Del-Nat's decision in December 2014 to bow out of the tire business in the wake of the U.S.'s imposing elevated import duties on Chinese passenger and light truck tires.

• International tire distributor Omni United Pte. Ltd. acquired Interstate Tire Distributor, a Commerce, Calif.-based wholesaler with six locations in four western states, and is evaluating sites on the West Coast for a mixing warehouse to help improve distribution efficiencies.

• Continental Tire the Americas L.L.C. bolstered its BestDrive L.L.C. business by acquiring Hill Tire Co., a Forest Park, Ga.-based ContiLifeCycle affiliated dealership with five commercial tire locations in Georgia and Alabama and two retread plants.

• McCarthy Tire Service carried out three acquisitions, the biggest of which was its June purchase of the assets of Ragan Tire Group L.L.C., the Concord, N.C.-based OTR tire and retreading specialist serving construction, quarrying and mining customers in North and South Carolina and Georgia. 

McCarthy's other deals were its May purchase of Commercial Truck Tire Center Inc., a single-location commercial tire business in Syracuse, N.Y., and the June purchase of Hartman Fleet Services Inc., a Manassas, Va.-based provider of heavy mechanical services, fleet maintenance and repair, and mobile mechanical services to customers in Northern Virginia, Maryland and Washington D.C.

• Bauer Built Inc. bought Central Tire & Tread, a single-outlet commercial tire dealership in Lexington, Neb., with plans to move the business into a 20,000-sq.-ft. facility to be built nearby.

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