Monro buys Valley Forge Tire, will acquire Craven Tire
Monro Muffler Brake Inc. has acquired King of Prussia, Pa.-based Valley Forge Tire & Auto Centers and has signed a definitive asset purchase agreement with Fairfax, Va.-based Craven Tire & Auto.
The Craven Tire acquisition is expected to close by the end of this month.
The combined purchase price of the two dealerships is $16.7 million. Valley Forge Tire and Craven Tire generated combined net sales of $22 million in 2006, say Monro officials.
"Together, Valley Forge Tire and Craven Tire will add 19 stores to the Monro chain, all of which management intends to operate under the Mr. Tire brand name.
"Management expects the acquired stores will break even in the first 12 months of operation under Monro ownership." Monro also plans to retain each dealership's employees.
"We are excited about the prospect of incorporating Valley Forge and Craven into our low-cost operating model," says John Van Heel, Monro's executive vice president and chief administrative officer.
"These transactions, which together generate annual sales equal to approximately 5% of Monro's total fiscal year 2007 sales, not only fit with our stated strategy of achieving growth through reasonably priced acquisitions, but also serve to significantly expand our tire store footprint."
Valley Tire operates primarily in the Philadelphia, Pa., area, while Craven Tire operates in northern Virginia.
Van Heel says Monro has 26 outlets in the Philadelphia area. Virginia is "a developing market for us."
The acquisitions will give Monro 134 tire stores, making it the fourth largest independent tire store chain in the United States, according to Modern Tire Dealer's Top 100 Domestic Independent Tire Store Chains list, which appears in the July 2007 edition of MTD.