The story behind two M&As: Tough decision, happy ending

Behind the small print and signed documents and handshakes of every M&A transaction, there lies a story.

Many share recurring themes: owners wanting to retire, buyers seeking to grow, both looking to capitalize on a tire industry that keeps the world perpetually mobile.

Here is the tale of two such sellers, both operated by a father and son duo who had every intention of growing their dealerships in the not-so-distant past, only to come to the same conclusion: Sell to a fellow owner and friend.

It was a difficult, yet common sense idea for Bob Fox and his son Nick, and for Wade Frey and his son Tanner, to sell their Point S dealerships to fellow Point S USA member Eric Gill.

The Foxes closed on the sale of their four shops in late April; the Freys followed suit, selling their two shops in early June. The four tire dealers knew Gill well; the Foxes and Freys both served on the Point S board, as did Gill.

For Bob and Nick Fox, the decision to sell revolved around a simple notion: Future debt.

At age 67, Bob wanted to retire, having been part of the tire business for four-plus decades. Both thought it unwise for Nick, 38, with a wife and four kids between the ages of 5 and 14, to borrow the money to buy out his dad, and thus swim in a turbulent sea of debt."

"We grew the business to be so valuable that it didn't make sense to take out a huge loan to let dad retire," Nick said.

"Dad didn't want to take a risk. I was hungry and wanted to grow. Eric provided a resolution."

So the Foxes made the decision to sell their four Montana shops: J&J Point S and Capital City Point S in Helena; and Fox's Point S Tire and Jerry Noble Point S in Great Falls.

As part of the deal, Nick has become a Gills Point S district manager, for now overseeing shops in Utah and Idaho. He also said he has the option to buy shares in the private company.

"It's certainly a change," Nick said, "but ultimately, it's a good thing. (Gills Point S Chief Operating Officer) Shane (Vorderstrasse) has given me a lot of trust and are letting me make an impact."

Nick called the Gills leadership team "very smart people, very good operators, and we have aligned visions of what we can accomplish together."

It was important that the Foxes not only sell to a fellow member of the Point S family, but also sell to a fellow, family-owned tire dealer who would treat their former employees well.

"A lot of people in the Point S group are close friends that I care deeply about," Nick said. "I'm a relationship person. Those are important to me. I didn't want to do anything to sacrifice their success. Keeping stores in the group was important."

And, he said, ensuring his 43 employees had a place in the Gills organization was equally important. Ultimately, all were offered their same position, at the same, or increased, salary, Nick said.

"There's more potential for them," he said. "There's excitement for the future."

One of the benefits of the sale, Nick said, is more family time.

And it was evident it already was paying benefits: Nick was sharing his story while vacationing in Disneyland with his family.

"I'm not dead. I'm still here to make a difference in a world," Nick said. "This is just a different piece of the puzzle in the story of life. It's just another adventure, and we'll see how awesome we can make this portion of it."

Family was the deciding factor of the Freys' sale of their two shops, both located in Utah: Murray Point S Tire & Auto in Murray and Bountiful Point S Tire & Auto in Bountiful, just south of Salt Lake City.

Just 18 months earlier the Freys were in expansion mode, in discussions to grow exponentially. They had just bought the Bountiful Point S location, a Point S showpiece that generates $2.5 million in sales annually

"We bought that and got it going, great guns," Wade told me. "Then something really crazy happened."

It was earlier this year that the social media career of Wade's 16-year-old granddaughter —Tanner's daughter, Anna Frey — had gone viral.

Anna, a budding professional tennis player, bears a striking resemblance to Brock Purdy, the San Francisco 49ers quarterback who led his team to the Super Bowl in February.

She began wearing a Purdy 49ers jersey on TikTok videos earlier this year, becoming an overnight sensation. Today, she has more than 2 million followers on TikTok and more than 730,000 followers on Instagram.

@annafrey #duet with @ mr. relevant😎 #fyp #annafrey #brockpurdy ♬ original sound - Chubba Purdy

And her pro tennis career is exploding, too, taking her to different states across the U.S. as she works to improve her United States Tennis Association (USTA) ranking, now at 1,030. The high school sophomore out of Farmington, Utah, is one of the most highly recruited tennis players in the U,S.

Tanner began managing his burgeoning daughter's career, Wade said, and was out of town half of his time.

"He was getting to be at a point of exhaustion," Wade said. "He was not in position to be true partner, so we made an abrupt decision to look for a buyer."

@annafrey yo @damian #fyp #annfrey #tennis ♬ original sound - Anna Frey

Vorderstrasse told Wade he needed to reach out to Gill, who continues to look for ways to expand his dealership, now with 71 locations in the Northwest and Northeast U.S.

Wade said Gill was familiar with his stores, and once they began to talk, a deal was consummated quickly.

"He saw our numbers and knew they were solid stores," Wade said.

The 65-year-old Wade, unlike Bob Fox, was a relative newcomer to the tire industry. After retiring from a career with an orthopedic firm, he decided to go into business with Tanner, buying the Murray store in 2014.

One of Wade's core tenets, like the Foxes, is relationships. It drove him to strike a deal with Gill not only because of his relationship with him, but also because he knew Gill would take care of his 18 employees.

"First and foremost, I had to find a right home for my employees," Wade said. "You develop a great association with them, so you want to make sure you find good home for the people who have sacrificed so much for you."

And keeping the dealership within the Point S family was important.

"I felt that knowing where Point S is going, it's representative of the independent tire dealer," Frey said. "And knowing what Eric's philosophy is and the organization he put together, I did not want to look too far outside the Point S family."

Wade said he was "grateful to know a guy who was in expansion mode and fit what I wanted to do."

If you're an independent tire dealer looking to sell, Wade said to consider two key aspects.

First, he said, be sure to find a good home for the people who helped make you successful.

Second, he said, is to make sure your accounting books are clean.

"If you have efficient accounting practice, and your books are clean," Wade said, "(the prospective buyer) will know this is a solid business. There are no red herrings to find."

The story of the Foxes and Freys concluded with a happy ending. Here's hoping that the countless others you read in our publication end the same way.