Around the Industry: Monro Adding 31 Shops
Monro Muffler Brake has signed definitive agreements to acquire 31 shops in New York, Pennsylvania and Massachusetts.
Twenty-seven of these shops are from Kost Tire Distributors and Kost Tire/Muffler and located in central New York and Pennsylvania. These will be rebranded as Mr. Tire stores. This allows the company to fill in existing markets where it currently operates Monro Brake & Tire locations. This acquisition, which management expects to complete in mid-August, increases Monro’s market share in these markets.
The remaining four shops — the ones located in Massachusetts — are from the Windsor Tire Co. and will operate as Monro Brake & Tire locations. The company completed the acquisition of these stores earlier this month.
Combined, these 31 acquired stores are expected to add roughly $31 million in annualized sales, representing a sales mix of 60 percent service and 40 percent tires. The acquisitions are expected to be slightly dilutive to earnings per share in the second fiscal quarter but breakeven in fiscal 2016, as cost synergies are expected to be realized more quickly due primarily to the company’s ability to leverage existing distribution in these markets.
“The current operating environment continues to create favorable acquisition opportunities,” president and CEO John Van Heel said on a June 23 conference call. He later added that Monro has more than 10 non-disclosure agreements signed, which he called “the highest number we ever had at any one time.”
During the fiscal first quarter ended June 27, 2015, Monro opened four locations and closed four locations, ending the three-month period with 999 company-operated shops and 145 franchised Car-X locations. This compares to 966 company-operated shops and one franchised location a year earlier.