Monro Inc. (Rochester, NY) has signed a definitive agreement to acquire 12 retail shops in Louisiana — a new state for the company. Management anticipates that the shops will add roughly $15 million in annualized sales, representing a sales mix of 35 percent service and 65 percent tires. The deal is expected to close in the current quarter.
During the fiscal third quarter, which ended Dec. 29, 2018, Monro completed its previously announced acquisition of five retail shops in Ohio. Management expects these locations to add approximately $5 million in annualized sales, representing a sales mix of 70 percent service and 30 percent tires.
And, early in the current quarter, the company completed its previously announced acquisition of 13 retail shops in Florida. These locations are expected to add roughly $12 million in annualized sales, representing a sales mix of 65 percent service and 35 percent tires.
Both acquisitions fill in existing markets.
A previously announced acquisition of seven shops, representing $8 million in annualized sales, is not expected to close “as the company has decided to not pursue the acquisition following an extended due diligence period,” according to a Jan. 31 press release.
President and CEO Brett Ponton told analysts on the company’s Jan. 31 quarterly report conference call that acquisitions remain a key pillar of Monro’s growth strategy. “We have been encouraged by the significant opportunities for consolidation we continue to see in the marketplace,” Ponton said. “We have a robust M&A pipeline and currently have over 10 [non-disclosure agreements (NDAs)] signed with targets that have been between five and 40 stores each. We believe we are well positioned to execute on these targets.”
Monro operates a chain of 1,197 company-operated shops, 99 franchised locations, eight wholesale locations and three retread facilities across 28 states in the Mid-Atlantic, New England, Great Lakes, Midwest and Southeast regions.