ROCHESTER, NY — Monro Muffler Brake has signed a definitive agreement with privately held Mile One Automotive to acquire 36 Mr. Tire locations in Maryland and Virginia.
The transaction is an asset purchase, valued at approximately $29 million, which will be funded primarily through Monro’s existing revolving credit facility. It includes 26 tire and automotive repair stores and 10 kiosks located in Mile One automobile dealerships. The company said it expects to close the transaction in March, subject to customary terms and conditions.
“The acquisition represents an exciting opportunity to increase our market share in the mid-Atlantic region, particularly in the important Baltimore, Maryland market,” said Robert Gross, Monro’s president and CEO. “Mr. Tire has a dominant presence, strong brand recognition and I believe the best performance in that market.
The stores and kiosks Monro will acquire generated approximately $50 million in sales last year. The company said it anticipates an EBITDA contribution of between $5 million and $6 million in the first year. “As such, we expect the acquisition to be immediately accretive to earnings and to contribute approximately $0.06 to $0.10 per share during fiscal 2005, which begins March 28, 2004,” said Gross.
Steven Fader, CEO of Mile One Automotive said he considered Monro to be the best fit in the long range plans for Mile One. “Our complimentary products and services, parallel commitment to our customers, and similarly dedicated employees will ensure a smooth integration,” said Fader. “Our agreement provides for a long-term, ongoing, strategic relationship that should only reinforce our continued support for all of our customers.”
The company has no plans to close any of the Mr. Tire locations, and the stores will continue to operate under the current brand name. Monro also said it intends to retain substantially all Mr. Tire store employees.
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