The management of Monro Muffler Brake — never shy to make a bolt-on acquisition — says that the Rochester, NY-based company is likely to make at least one purchase before the current quarter is over, and that could include rival Midas Inc.
Monro President John Van Heel disclosed on a Jan. 24 conference call that the company is in talks with six companies and admitted that one of them is Midas. Van Heel said that the others are chains of between five and 40 stores, four of which are within Monro’s existing geographic footprint, with the other being adjacent.
The current business climate makes it a good time for Monro to strike a deal, according to Rob Gross, chairman and CEO. “As competitors struggle to address the rising cost of goods, some are becoming more willing to be acquired,” Gross told analysts on the call. “Given this environment and what we believe will be growing seller concern over potential future income and capital gains tax increases, we hope to step up our acquisition activity even more in the coming year.
“We have plenty of liquidity and strong cash flow to complete these deals. We remain very disciplined on the prices we will pay and believe that the trends we are seeing in our industry — as well as the economy overall — are on our side.”
It’s worth noting that, during the fiscal third quarter ended Dec. 24, 2011, Monro was actually the one doing some selling. The company sold seven shops on Long Island, which management called “an underperforming market” for Monro. The buyer, according to Tire Business magazine, was Mavis Discount Tire of Millwood, NY. — Marc Vincent