And with new majority owner Leonard Green & Partners (LGP), based in Los Angeles, Calif., Garman – who oversees Sun Auto Tire’s merger and acquisition activity – says buyouts will continue at a steady pace. .
And they won’t be confined to Sun Auto’s traditional domain, the southwestern United States, he adds.
“We’re going to move north a bit – maybe northwest.”
And other acquisitions in the Southeastern United States – like Hogan & Sons, a seven-location Virginia-based tire dealer that Sun Auto took over last month – are possible.
The acquisition of Hogan & Sons was Sun Auto’s first transaction on the east coast.
The dealership “has a great management team and we believe we can grow” in the Virginia market over the next several years, says Garman. “We really love the opportunity in this market and we really love the Hogan team.
“We still think there are a lot of opportunities in the southwest, but where we feel we can build a footprint with a good brand and good people and have room to grow – these are opportunities that we will not want to pass up, Hogan is a good example.
“Lots of opportunities”
Founded in 1989, LGP has more than $ 50 billion in assets and has invested in more than 100 companies, including auto body chain Caliber Collision, which – with company backing – has grown into what makers of Sun Auto call it “the largest auto body repair service provider. In the countryside.”
Garman says that “the experience with Caliber and other brands they’ve invested in – which started out as Sun” will prove to be invaluable.
“The expertise to get from where we are today to where we want to be in five years is an important part of what they bring to the table. “
Tire dealers are an attractive target for investors, Garman notes.
“We are in a very fragmented industry – even with all of the M&A activity going on – with lots of opportunities, particularly in the Southwest, Northwest and some other southern states.
“We always like to say that we are a relatively recession-resistant industry and that makes us attractive. I think we will see some activity (M&A) for the foreseeable future. “
When looking to acquire tire dealers, Sun Auto considers different criteria, according to Garman.
“And if we enter a new market, those requirements may be a little different.”
An attractive footprint, “a strong reputation” with customers and “then obviously income” are pieces of the puzzle.
“If we’re already in a market and looking to expand our presence, is (the potential acquisition) complementary to what we’re doing there?
“At the end of the day, we’re looking to buy good companies. We’ve been fortunate to have bought some great companies that are full of great people and we’re doing a great job of retaining those people.
Sun Auto Tire has over 200 locations and is one of the 10 largest tire store chains on the 2021 MTD 100 list.