Monro's Back on the Acquisition Trail. Who Will It Pick Up Next?
Several months after putting additional tire dealership buy-outs on hold, Monro Inc. is back in the acquisition game, revealing on Oct. 28 that it has picked up Allen Tire Co., a longstanding independent in southern California.
The deal, which is expected to add $20 million in annualized sales to Monro’s ledger, gives the company 17 stores that have been owned and operated by the Allen family since 1973, and further cements Monro’s position as the country’s third largest independent tire store chain - right behind Mavis Tire Express Services Corp. (number two) and Discount Tire (number one), according to the 2020 MTD 100.
The Allen Tire purchase also sets the table for continued acquisitions in what Monro Chairman Robert Mellor calls “the attractive West Coast region.”
In addition to jump-starting its merger and acquisition activities, Monro has resumed its store rebrand program, transforming more than 40 stores during its second quarter - 18 of which were moved over to a tire-oriented format.
Who’s next on Monro’s acquisition list? When will the company announce its next purchase?
Setting aside speculation regarding specific names and based on recent history, I predict that the chain’s next acquisition will be a mid-sized dealership on - or near - the West Coast. (I'm thinking California, to be exact.) And it will be announced during the first quarter of 2021.
Last year, Monro acquired Certified Tire & Service Centers Inc., a California-based dealership that operated 40 stores. Monro also acquired Skip’s Tire & Auto Repair Centers and Lloyd’s Tire & Auto Care, both based in "The Golden State."
In a recently released slide presentation, Monro said that mergers and acquisitions remain “a critical pillar" of its growth strategy and that “evaluating a robust pipeline of attractive M&A opportunities that support our strategy” will remain a priority.
When it comes to Monro and more tire dealership acquisitions, it’s not a question of “if.” It’s now, once again, a question of “when.”