ROCHESTER, N.Y. — Monro Muffler Brake has completed its acquisition of Vespia Tire Centers Inc. The deal became effective June 5.
The 24 Vespia locations purchased, which generated net sales of approximately $36 million in 2010, will expand Monro’s footprint in New Jersey and Eastern Pennsylvania. The company said it expects the acquisition to be slightly accretive in fiscal 2012, and the benefit of this acquisition is included in the company’s previously provided guidance for fiscal year 2012. The purchase was funded through Monro’s existing line of credit.
Monro also has completed an amendment of its existing credit agreement that extends the maturity date by five years. The amended agreement increases to $175 million the amount of borrowings the company can obtain. Under the new credit agreement, Monro may also request an increase in availability of funds of up to an additional $75 million. Based upon the company’s current performance, borrowings will bear interest at LIBOR plus 100 basis points.
"We are pleased to have completed both the Vespia transaction and to have extended our credit agreement," said Robert Gross, chairman and CEO. "The Vespia transaction fits well into our stated strategy of seeking value-priced acquisitions that strengthen our geographic footprint and expand our market share. We are currently integrating the Vespia stores into our highly efficient business model and expect to benefit from the established store density, strong brand recognition and loyal customer base of this well-established chain. In addition, with increased borrowing capacity on very favorable terms, our amended credit agreement enhances our financial flexibility and ability to continue executing on our corporate strategy. Importantly, this exhibits the lending community’s deep confidence in our prospects for growth."
