The third quarter of 2019 saw the pace of M&A activity tick upward versus the third quarter of 2018. Though total transaction volume remained light relative to the highs of 2016-2017, the third quarter saw more meaningful retail activity from Roark Capital-backed Driven Brands Inc, which expanded its Take 5 network of fast-lube outlets to 483 locations across the U.S. and Canada, while GB Auto’s acquisition of Lamb’s Tire brings the group’s total presence to more than 100 locations across the western United States. As seen in the first and second quarters of 2019, the commercial/OTR segment saw yet another Bridgestone GCR divestiture, selling off 10 commercial locations and one retread plant to Boulevard Tire. Both the wholesale and manufacturing segments saw notable transaction activity from Myers Industries and Titan International, respectively.

Key Takeaways:

• Continued acquisition activity on the retail front, with large players aggressively pursuing nationwide expansion strategies, and on the commercial front, continued divestitures of manufacturer-owned locations
• Slight uptick on transaction volume over 2018, but still below highs of the third quarters of 2016 and 2017
• Activity both domestically and abroad, with both PE-backed and strategic buyers
• Positive macroeconomic trends, despite pockets of turbulence regarding tariffs and political uncertainty

Historical M&A Trends by Period / Sector 

Total Transaction Count

Transactions per Sector

Retail

Retail M&A Transactions - Q3 2019

Greenbriar Equity Group

In July, Greenbriar Equity Group acquired Lamb’s Tire & Automotive Centers’ 18 stores in central Texas. The acquisition of Lamb’s marks GB Auto’s sixth acquisition in the automotive aftermarket since December 2017, bringing GB Auto to 101 locations in Arizona, California, Nevada, and Texas.

Driven Brands Inc.

Throughout the third quarter, Roark Capital-backed Driven Brands Inc. announced the acquisitions of 61 automotive services outlets, including six through its acquisition of Bolton Oil Change, 28 through its acquisition of Express Automotive Group, and 27 through its acquisition of Fast Track Oil Change Centers. The acquisitions expand Driven Brands’ operations throughout Texas to 148 outlets and throughout Wisconsin to 40 outlets. Driven expects to convert the outlets to its Take 5 Oil Change brand over time. The three acquisitions for the Take 5 brand this quarter mark five for the year so far, following February and April’s purchases of Super-Lube and Advanced Kwik Lube. The acquisitions expand Take 5’s network to 483 locations across the United States and Canada.

Wholesale

Wholesale M&A Transactions - Q3 2019

Myers Industries

Myers Industries (NYSE:MYE) has agreed to acquire Akron, Ohio-based Tuffy Manufacturing Industries, a warehouse distributor of tire repair equipment and supplies. The acquisition will help Myers grow in key markets and expand its Myers Tire Supply division, adding approximately $20 million in sales for the trailing 12 months ended June 30.

Commercial / OTR

Commercial / OTR M&A Transactions - Q3 2019

Boulevard Tire

In August, Boulevard Tire announced its acquisition of 10 GCR Tires & Services stores along with one retread plant in Florida and Georgia from Bridgestone Americas. This acquisition represents Bridgestone America’s fourth set of GCR divestitures. Deland, Florida-based Boulevard, a longtime Bridgestone-Bandag retread licensee, now operates 28 commercial tire service stores and four retread plants in Florida and Georgia. With this most recent divestiture, Bridgestone’s total GCR footprint drops to fewer than 90 locations, down from its peak of more than 200 locations across the U.S. and Canada.

Manufacturing

Manufacturing M&A Transactions - Q3 2019

Titan International

Titan International (NYSE:TWI), has fully bought out one of its two partners in its JSC Voltyre Prom joint venture. Titan purchased a 20.3% equity stake from an affiliate of private equity firm One Equity Partners for $47 million, bringing Titan’s stake in the Volgograd, Russia-based tire manufacturer to 64.3%. The remaining partner, the Russian Direct Investment Fund (RDIF) continues to hold a 35.7% minority stake; however, it has agreed to sell that stake to Titan for roughly $50 million in cash and shares of Titan common stock. JSC Voltyre Prom’s two million-plus square foot factory produces agricultural and industrial tires, with capacity upwards of two million tires per year.

Owner Resource Group

Owner Resource Group (ORG), an Austin, Texas-based private equity firm, has completed its recapitalization of OTR International, the Rome, Georgia-based manufacturer of OTR tires, wheels and wheel assemblies. OTR International sells to both OEMs and aftermarket customers and maintains global operations, with 39 facilities across North America, Europe, and Asia. ORG and OTR plan to use the funds to improve the company’s financing relationships and grow the company’s footprint organically as well as through acquisitions.