ROCHESTER, NY — Monro Muffler Brake has entered into an agreement to acquire substantially all of the assets of ProCare Automotive Service Solutions, L.L.C., a privately owned automotive service retailer, for approximately $14 million in cash.
The transaction is to be effected under the authority of the United States Bankruptcy Court overseeing ProCare’s Chapter 11 bankruptcy case, which began March 5. Monroe also has agreed to provide ProCare with a $3.65 million debtor-in-possession financing facility to be used by ProCare for its general working capital needs pending approval and consummation of the transaction. ProCare’s obligations under the facility will be repaid and the facility retired upon such consummation.
ProCare operates 82 retail locations that offer automotive maintenance and repair services. The stores generate approximately $50 million in annual sales and are located in eight metropolitan areas throughout Ohio, Pennsylvania and Kentucky.
“We are excited about the potential acquisition of ProCare, as its regional heritage and industry expertise would complement our existing business and enhance our market share,” said Robert Gross, president and chief executive officer of Monro Muffler Brake, Inc. “Moreover, it fits squarely with our stated strategy to seek attractively priced acquisitions that expand our reach within our geographic footprint.”
Monro plans to operate all of ProCare’s existing retail locations as either service or tire stores. The company also expects to offer employment to all ProCare store employees. The transaction is subject to certain bidding procedures which will be outlined by the Bankruptcy Court. There is no assurance that ProCare will not receive a higher or better offer for its assets in the auction process, that the company will be the successful bidder at any auction conducted by ProCare, or that the Bankruptcy Court will approve ProCare’s sale to the company.
In light of the ProCare acquisition and corresponding integration process, Monro and Strauss Discount Automotive have agreed to amend the terms of their agreement so that Monro will now have the option to purchase the remaining 87 percent of Strauss on or before September 30. Monro purchased a 13 percent ownership stake in Strauss in October 2005 and had the option to acquire an additional 20 percent stake on or before March 31, and the remaining 67 percent anytime prior to April 1, 2007.
Gross stated, “We are pleased with our progress on the Strauss transaction and look forward to having Strauss Discount Automotive join Monro. Both companies continue to work together in order to bring the transaction to a timely conclusion. However, I have always said that it would not be prudent to attempt two large acquisitions simultaneously and the timing of ProCare’s filing required our immediate attention so as not to lose the opportunity. I am thrilled with the prospect of further accelerating our growth in fiscal 2007.”
For more information about Monro Muffler Brake, go to: www.monro.com .
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