Frank Kneller is the CEO of GB Auto Service Inc., one of the fastest growing conglomerates of independent tire dealerships in the country.
A division of Greenbriar Equity Group LP, GB Auto Service, over the last several years, has acquired a number of tire chains, including Lamb’s Tire & Automotive Centers, Evans Tire & Service, Ramona Tire Inc. and others. Most recently, it picked up more than 30 Sun Devil Auto Service locations in Arizona, Nevada and Texas.
Today, GB Auto Service, which has 133 locations that sell tires, occupies the number eight spot on the 2020 Modern Tire Dealer 100, which will be featured in the July issue of MTD. In this exclusive interview, Kneller discusses the company’s acquisition strategy, what it looks for in potential acquisitions and more.
MTD: GB Auto Service has made a number of major tire store chain acquisitions over the last several years. You now have more than 130 locations. Can you elaborate on your acquisition strategy?
Kneller: Greenbriar and I have both believed for many years that the do-it-for-me (DIFM) segment of the aftermarket is a large and growing market with favorable secular trends and cycle-resistant characteristics, given the non-discretionary nature of many of the services. We also feel that great managers who are supported by the benefits of a larger platform – scale matters in this market – can drive attractive and repeatable store results.
As a result, our strategy is to partner with the best teams in the industry and assemble a pool of talent that we feel is unmatched. To this end, we believe we offer an attractive and differentiated exit alternative for many owners looking to both preserve their brand/legacy and know their employees will become part of a larger but supportive and nimble team organization.
MTD: Many of your recent acquisitions have been dealerships that had more than a dozen locations at the time of buy-out. And all of your acquisitions, to our knowledge, have been in the western and southwestern U.S. What’s the rationale behind targeting chains of that general size, all in one particular region?
Kneller: The combination of large markets with attractive demographics, along with pre-existing relationships, helped inform our decision to focus in the west and southwest. Since establishing our initial footprint in Arizona, Nevada and southern California, we’ve focused on in-market or adjacent acquisitions in Texas and green-fields to drive regional density in order to best leverage our field teams and support services.
MTD: Do you have geographic whitespace within your current footprint that you would like to fill? Do you have any plans to acquire chains in other regions of the country, and if so, which areas are you looking at?
Kneller: Although there is a great deal of cohesion among our current acquisitions and green-fields, the truth is that we look at a number of factors when determining whether an acquisition is a fit with our overall direction. Without sharing too much of the “secret recipe,” I will say that we absolutely value companies with strong business fundamentals, community ties, and customer service expertise – not to mention a track record of strong financial performance. Geographic location, while not a non-factor, is less important than the business fundamentals.
MTD: Do you have any plans to build more new, from-the-ground-up stores as part of your expansion plans or will you continue to grow through acquisition of existing businesses?
Kneller: GB Auto has a track record of both acquisition and new store development, with several projects in the works in existing markets.
MTD: Over the years and throughout various acquisitions, you have made it a point to maintain your acquisitions’ brand identities. Why is this important?
Kneller: We respect the fact that our customers are critical to what made these companies successful in the first place, so in many cases, we believe in maintaining local brand identities. However, we also recognize the importance of having a cohesive platform behind the scenes, and to that end we have tightly integrated our acquired businesses across a variety of dimensions, including operational best-practices, product and service screens, point-of-sale and reporting systems, and employee compensation and benefits structures.
The companies with whom we've partnered have developed strong connections to their local communities over many decades and in most cases, in-store personnel and area leadership remain the same because we want our customers to have a familiar experience that is enhanced by the technology, training and other resources we can offer them.
“While mergers and acquisitions can be unpredictable, we intend to aggressively increase our footprint over the remainder of 2020 and beyond,” he says.