The second quarter of 2019 saw the pace of M&A activity taper from the highs of 2017 and 2018 to levels more in line with what the industry experienced in 2015-2016. Although total transaction volume remained light relative to the past two years, the second quarter saw more meaningful activity from Monro, which expanded its network to 1,240 locations in 30 states. Similar to the first quarter of 2019, the commercial/OTR segment saw yet another Bridgestone GCR divestiture, selling off 13 commercial and 3 retread locations to McCarthy Tire. Both the wholesale and manufacturing segments saw notable transaction activity from K&M Tire and sponsor-backed Wheel Pros, respectively.
In June, Driven Brands Inc. announced its acquisition of Advance Kwik Lube, a 25-outlet automotive services chain with operations throughout Texas. Driven expects to convert the outlets to its Take 5 Oil Change brand over time. This is the second acquisition for the Take 5 brand this year, following February’s purchase of Super-Lube, a 48-location retail services chain with operations in Florida, Illinois, Indiana, and Wisconsin. The acquisition expands Take 5’s network to 375 locations across the United States.
Monro, Inc. has continued executing on its aggressive acquisition strategy in the second quarter, this time through its Tire Choice brand, which announced its acquisition of Allied Discount Tire & Brake in April. The acquisition of Louisiana-based Allied adds 12 locations to Monro’s portfolio and extends the retail giant’s reach into Louisiana. Monro’s second-quarter efforts bring the company’s combined presence to more than 1,240 stores, 98 franchised locations, eight wholesale locations, and three retread facilities across 30 states.
K&M Tire Inc. has agreed to acquire Michigan-based Cadillac Wholesale Tire Inc., one of the state’s leading distributors of passenger, light truck, truck, and farm tires. The acquisition adds a 25,000-square-foot warehouse to K&M’s portfolio, expanding its presence to three distribution centers in Michigan, and a total of 30 wholesale distribution locations serving customers across 27 states.
In June, McCarthy Tire Service announced its acquisition of 13 GCR Tires & Services stores along with three retread plants from Bridgestone Americas. This is McCarthy’s second acquisition of GCR assets in the past two years, with McCarthy picking up six GCR locations in the third quarter of 2017. Pennsylvania-based McCarthy now operates 60 service locations and 10 retread plants in eight states across the East Coast. This most recent divestiture brings Bridgestone’s total GCR footprint to slightly more than 100 locations, down from its peak of more than 200 locations across the U.S. and Canada.
Wheel Pros, LLC, a portfolio company of private equity firm Clearlake Capital, acquired MHT Luxury Wheels, an industry-leading custom wheel manufacturer and distributor of state-of-the-art custom wheels across all major vehicle segments. The combined company will operate under the Wheel Pros name, offering 22 brands, approximately 15,000 SKUs, and will sell its products through a footprint of 30 national and three international distribution centers, as well as direct to consumers through online channels.