Monro Inc. is divesting of its wholesale and tire distribution business — which the company values at an estimated $105 million — and selling it to American Tire Distributors Inc. (ATD)
In the agreement with ATD, Monro says ATD will provide tire distribution directly to its stores.
Monro President and CEO Mike Broderick told investors that a thorough review of the company's wholesale operations showed, "We were too small to be an effective competitor."
As of the end of the previous fiscal year, Monro had seven wholesale locations — in the Carolinas, Kentucky and Tennessee. The company leases all of those locations.
Monro says that the supply agreement "will improve the company's tire availability, allowing the company to be a better seller of tires at higher margins."
Also, the company will be able to focus on its retail operations, category management and working capital optimization.
The deal is expected to close in June.
