Monro Muffler Brake buys Tire Warehouse Central for $34 million
Monro Muffler Brake Inc. has signed a definitive agreement to acquire the assets of Tire Warehouse Central Inc., a 46-store, privately owned tire store chain serving five New England states.The transaction is expected to close in early October, according to Monro.
Monro paid $34 million for the Tire Warehouse assets, which include 40 tire stores and six tire franchise locations; real estate assets for 12 store locations; and a distribution center located in Swanzy, N.H.
Tire Warehouse, based in Keene, N.H., is the 21st largest tire store chain in the United States, according to the Modern Tire Dealer 100.
Monro also has completed the acquisition of the assets of Midwest Tire & Auto Repair, a four-store independent tire chain in northwest Indiana, for $2 million.
“We believe that the acquisitions of both of these businesses fit well into our stated strategy of seeking value-priced transactions that expand our market share," says Monro President John Van Heel.
"We are delighted to add Midwest Tire and Tire Warehouse to the Monro family, and look forward to capitalizing on the significant opportunities presented by the addition of 50 stores, nearly $60 million in sales, and an additional 500,000 tire units."
With the acquisitions, Monro has 204 independent tire dealerships, which ranks it fourth on the MTD 100.
"Coupled with our acquisition of Autotire earlier this year, we have added 76 stores and $90 million of annual sales, or approximately 18% top line growth through acquisitions, so far this year,” says Van Heel.
Tire Warehouse, which focuses solely on tires and related services, generated net sales of approximately $53 million in 2008.
Following the acquisition and initial integration of the business, Monro says it "intends to further leverage the Tire Warehouse store presence and distribution facilities by converting 50 of its existing Monro service stores in these markets to its Black Gold format.
Black Gold is a program designed to increase sales in Monro’s service stores, particularly of tires and related services.
Midwest Tire generated net sales of approximately $6 million in 2008. The four stores will be converted to the Mr. Tire brand name.
Both acquisitions will be funded through Monro's existing line of credit. "It is management’s intention to retain the store employees of the acquired businesses," says the company.