Merger-and-acquisition activity soared to unprecedented heights in 2018, especially in the North American wholesale and retail sectors.
Among wholesalers, M&A affected nearly half of the 15 largest U.S. wholesalers, from perennial No. 1 American Tire Distributors Inc. (ATD) on down.
ATD made headlines throughout the year, but not for reasons ATD management had much influence over.
Here's the 30-second elevator pitch version of what happened:
Two of the biggest competitors in the market — Goodyear and Bridgestone Americas — agreed to form a wholesale distribution partnership, TireHub L.L.C., a deal that allowed them both to end distribution agreements with ATD. TireHub opened for business in July with more than 80 warehouses under its wing.
Parallel to the ATD/Goodyear/Bridgestone news, Michelin North America Inc. and Sumitomo Corp. of Americas formed their own distribution partnership, National Tire Wholesale (NTW), combining Michelin's TCi Tire Centers wholesale distribution activities with the Carroll Tire wholesale assets of TBC Corp.
In unrelated dealings:
A "new" wholesaler — Treadmaxx Tire Distributors Inc. — arrived on the scene early in the year, the result of an acquisition in the retail sector: Mavis Tire Supply of Millwood, N.Y., bought Kauffman Tire Co.'s 69 retail stores in Florida and Georgia in January, leaving Kauffman's Treadmaxx wholesale activities as a stand-alone business.
A group of Coker Group executives, led by President and CEO Wade Kawasaki and with backing from Irving Place Capital, acquired the supplier of collector car and motorcycle tires and wheels. The acquisition includes Coker Tire Co. Inc., Wheel Vintiques, Universal Vintage Tire, Phoenix Race Tires, Specialty Wheel and Roadster Wire Wheel brands.
Meanwhile China's Sailun Jinyu Tyre Co. Ltd. took over wholesaler Dynamic Tire Inc. and converted Dynamic's Husky Tire Corp. affiliate to Sailun Jinyu International and moved it to separate quarters in Brampton, Ontario. The revamped distributor handles the Blacklion, RoadX and Ironhead brands, sourced from Sailun Jinyu factories in China and Vietnam.
Mavis Tire Supply of Millwood, N.Y., set the pace this past year. In addition to buying the Kauffman Tire retail stores in January, it merged with Express Oil/Tire Engineers in February, adding the Birmingham, Ala.-based company's 400-plus company-run and franchised locations to its ledger.
It also acquired Sun Tire & Automotive Service of Jacksonville, Fla., and a handful of smaller dealerships that added up to more than 300 new points of sale, increasing its reach to nearly 650 stores, plus 118 more Express Oil/Tire Engineers franchised locations.
Monro Inc., the industry's M&A leader of the past several years, and Icahn Enterprises L.P. (Pep Boys) were active in the acquisitions arena as well, albeit at a slower pace than in previous years.
Monro added 43 locations in 13 separate transactions, including:
Seven Appalachian Tire retail stores in Kentucky, Ohio, Virginia and West Virginia were rebranded as Mr. Tire Auto Service Centers, representing roughly $7 million in annualized sales.
Jeff Pohlman Tire & Auto Service Inc., a five-store chain with $5 million in annual sales, located in southwest Ohio that Monro is converting to its Car-X and Mr. Tire names.
Steele-Guiltner Inc., four stores, in Arkansas and Tennessee, since converted to Car-X outlets.
Quality Tire & Auto Inc. in Willowbrook, Ill., and C&R Auto Service Inc. of Illinois (since converted to Car-X outlets); and Walton's Automotive L.L.C. in Columbia, S.C. (now Treadquarters).