Back in the family, Purcell Tire looks to the future
With ownership back in the hands of Bob and Juanita Purcell and new management in place, Purcell Tire & Rubber Co. says it's poised for growth with "a strategic business plan designed to strengthen the company's position as an industry leader." However, the situation wasn't quite so certain a year or more ago, when the company was talking with a number of potential buyers.
"In early 2006, the company received several inquiries regarding selling (it) from pretty significant and serious parties," Keith Butcher, Purcell Tire executive president, recently told moderntiredealer.com. (Butcher and Joe Strycharz, Purcell Tire's executive vice president, joined the Potosi, Mo.-based dealership one month ago. Long-time president of Purcell Tire's eastern operation, Dennis Flynn, is Purcell Tire's operating president.)
Up until that point, Purcell Tire had operated under an ESOP (Employee Stock Option) structure, which it adopted in 2002. But acting on advice from its legal counsel, Purcell Tire's board entered into talks with potential buyers. "It was shopped pretty heavily around the country to some 170 potential buyers -- private equity firms, companies, all kinds of folks." Butcher would not reveal if tire manufacturers numbered among the suitors.
"Numerous parties came to the company to go through an initial management presentation," he said. "We went through several rounds of bids until it came down to six parties, and then a few parties that from an overall yield perspective were the best."
Meanwhile, longtime Purcell Tire owners Bob and Juanita Purcell were "on the sidelines," according to Butcher. "Very early on in the process… they (stepped away) from the (company's) board because they were two of the five members. They had their own legal counsel and they stepped out of process… they received counsel that if they had any interest in topping a bid, they would have to stay out of the mix; otherwise they would create a conflict of interest. They weren't involved in any of the meetings or the votes or the decision-making process."
Not for long: At the end of the nearly one-year-long bidding process, Bob and Juanita stepped forward and bought their own company back -- using their own money. And on Aug. 17, 100% ownership of Purcell Tire, which Bob's father, Robert M. Purcell, founded in 1935, reverted back to them.
Now, said Butcher, it's time for Purcell Tire to "re-invent" and "refresh" itself.
"We really feel that in distribution there is a lot of opportunity. Distribution has somewhat had some demographic challenges. There's an 'aging-out' going on in all types of distribution, specifically in tire distribution, so there are opportunities to grow and fill in geographic gaps, whether they be by organic growth or by carefully looking at acquisitions.
"We think of distribution very broadly," he continued. "Everything we do is distribution: commercial tire, OTR, the whole gamut -- it's all distribution to us. We take what someone else manufactures and are distributing it."
When asked by moderntiredealer.com if management has identified any areas that need improvement, Butcher replied, "I think there are a lot of areas for potential improvement. I don't know if we have identified any individual areas that stick out to us… once again, this company is very successful (and) it's well capitalized.
"I think there are a variety of things we could do better. A lot of it comes with the 'cyclicality' of business; you need to re-energize yourself every three, four, five or six years -- re-invent yourself and find new ways to go to market."
Butcher and Strycharz are financial industry veterans. Both came to Purcell Tire from Morgan Stanley. Both have served as strategic advisors to Purcell Tire's board over the years. Are there plans down the line to sell Purcell Tire?
"Absolutely not," said Butcher. "No intent whatsoever."
The next step, he explained, is "re-figuring our sales organization and refreshing it and looking at different regions. We're going to re-brand the company to make it one stated brand throughout the county."
Re-branding plans include "elegantly" phasing out the Purcell Western States name in the western part of the United States. "It's just going to be Purcell Tire & Rubber Co. We're spending a lot of time developing a unified voice to the market. I think that's very important for the company."
He added that Purcell Tire management also plans to develop a new cash- and stock-based incentive program for employees.