How to Harness the Mergers and Acquisitions Bull Market

Michael McGregor
Posted on September 30, 2019

A few months back I attended a tire-buying group’s annual meeting after helping one of that group’s founding members sell their business to a private equity group. I hear there was some discussion as to whether or not to invite me back, as if I was the bad guy. All I did was help a tire dealer get rich.

As capital continues to flow to the big market consolidators, it’s clear that acquisitions won’t slow down unless the economy cools or some big deal blows up. Trying to stop it is like trying to stop capitalism. It’s not going to happen. Instead of fighting it, let’s examine some ways tire dealers and others in the industry ecosystem can harness the bull market.

Small tire dealers

Small tire dealers can harness the mergers and acquisitions (M&A) bull market by improving their competitive position. For small tire dealers this involves taking an honest look at the following:

  • life stage and risk profile of the owner;
  • financial and physical condition of the business; and
  • the customer loyalty you engender in the market.

Step back and take an unvarnished look at your business and ask if you have the energy and resources to improve it. Then look at the growing national and regional chains and ask yourself, “What do they do better than me?”

To start, they often have a consistent store image — visible, clean locations with similar footprints in high traffic parts of town. They promote their business consistently in good times and bad. Maybe they have a consistent in-store customer service delivery process.

They are consistent in many ways. Are you? If you’re in a market that competitors will be eyeing, you need to protect your position.

Getting bigger and more profitable in your market will make you a stronger competitor. Retaining your people by giving them more opportunities for advancement will make you a stronger competitor. Not staying in the run-down part of town forever and moving into new, higher-income areas will make you a stronger competitor.

Growing your sales, locations and profits improves your competitive position and business value, and it makes you wealthier. Maybe the timing isn’t right for you to ride this bull, but you’ll be ready for the next one if you prepare now.

Mid-size tire dealers

With 10 to 15 or more stores, tire dealers can harness the M&A bull market by taking advantage of the raised level of interest in acquisitions and becoming mini-consolidators themselves. You’re bankable. You are a proven entity. You’ve probably done acquisitions already in an ad-hoc fashion. Many of the larger consolidators can’t be bothered with one- to three-store acquisitions. That’s your sweet spot. Develop a list of small competitors in markets and areas in which you are interested in expanding. Go visit the stores and rank them by location attractiveness and then by how close the owner appears to be to retirement. Call them up (don’t email) and start meeting face-to-face with the retirement-age owners first and move down the list. Then keep in regular touch.

Solidify the hold on your market by growing locations, sales and profits to improve your business value. Be perceived as the dominant player in your market and you’ll be worth even more when you ride the bull.

Tire buying groups

Tire buying groups are wonderful organizations that level the playing field for tire dealers on purchases. In addition, they provide them with innovative programs like low-cost workers’ compensation and short-term lending programs. They’ve helped their members grow and become wealthy.

Sometimes a member will become an attractive acquisition candidate and leave the group. Take pride in that — embrace it and use it as a marketing tool to attract new members because there’s not much else that you can do about it. Maybe look into making all of your programs more “sticky” so it’s painful to leave. You might also facilitate business transfers among members by knowing which members will buy out retiring or struggling members to keep volume purchases all in-house.

Taking the bull by the horns

Consolidation is inexorable and unpredictable in the retail tire business.

Even tire manufacturers have to deal with the aftermath of a tire dealer’s acquisition, and it can wreak havoc on their market share. That is why they need to be channel- and customer-smart while dealing with the national chains and maneuvering the consolidating independent tire dealer market.

Maybe manufacturers need to get better at picking and choosing which of the independents they want to partner with in the long term. And vice-versa!

It’s fun to watch and pontificate about all the activity, but there’s an old Spanish proverb that goes, “Talking of bulls is not the same as being in the bullring.”

Michael McGregor is a partner at Focus Investment Banking LLC ( and advises and assists multi-location tire dealers on mergers and acquisitions in the automotive aftermarket. For more information contact him at

Related Topics: consolidation, mergers and acquisitions, retail

Comments ( 0 )
More Stories
Hamaton has expanded the valve stem range for its U-Pro Hybrid 2.0 TPMS sensor with the addition of the Gun Metal Grey Clamp-In valve.

Hamaton Introduces TPMS Valve in Gun Metal Grey

In response to the increasing popularity of gun metal grey alloys, Hamaton Inc. has released a TPMS valve for its U-Pro Hybrid 2.0 dual frequency, configurable and programmable sensor that matches the wheel’s distinctive finish.

Figure 5: Installation of a snap-in sensor/valve assembly.

TPMS: Chevrolet HHR and Malibu, 2007-16

The tire pressure monitoring system (TPMS) on certain models of the Chevrolet HHR and Malibu (2007-2016) alerts the driver of a large tire pressure change in any of the four tires while the vehicle is being driven. The system also will display individual tire pressures and their locations on the driver information center (DIC).

In the past, European drivers wouldn’t go on summer vacation on all-season tires.

Demand for All-Season Tires Grows in Europe

All over the world, people are talking about “climate change.” In Europe, this is hardly surprising, as over the last couple of years there has been some pretty erratic weather here.


Four Factors That Enhance the Customer Experience

Matthew “Mack” Robinson was the older brother of baseball great Jackie Robinson. He was also a pretty good track and field athlete, and made the U.S. team that competed in the 1936 Olympics in Berlin. With no coach to help him and running in a worn-out pair of track shoes, Mack broke the world record in the 200-meter race. In fact, he not only broke the world record, he shattered it. And he finished in second place. The man who came in first place was named Jesse Owens.


Impending New Tariff Puts Domestic Manufacturers in a Net Positive Position

Our recent conversations with dealers leave us with a view that retail sell-out trends showed strength in August with a notable pickup in momentum from July. From a volume standpoint, surveyed dealers reported they saw unit sales improve roughly 3% to 4% compared to the prior year’s period and came in notably above recent growth rates observed in our tire demand index.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!