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Acquisitions | 12 Months Ended
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Mar. 25, 2017
Acquisitions [Abstract] |
Acquisitions | NOTE 2 – ACQUISITIONS ﻿ Monro’s acquisitions are strategic moves in our plan to fill in and expand our presence in our existing and contiguous markets, and leverage fixed operating costs such as distribution, advertising and administration. Acquisitions in this footnote include acquisitions of five or more locations as well as acquisitions of one to four locations that are part of the Company’s greenfield store growth strategy. ﻿ Subsequent Events ﻿ We have signed definitive asset purchase agreements to complete the acquisition of five retail tire and automotive repair stores located within our existing markets through four additional acquisitions. These transactions are expected to close during the first quarter of fiscal 2018. The acquisitions are expected to be financed through our existing credit facility. ﻿ On April 2 3, 2017, we acquired one retail tire and automotive repair store located in Florida from Collier Automotive Group, Inc. The store operates under The Tire Choice name. The acquisition was financed through our existing credit facility. ﻿ Fiscal 2017 ﻿ During fiscal 2017, we acquired the following businesses for an aggregate purchase price of $141.8 million. The acquisitions were financed through our existing credit facility. The results of operations for these acquisitions are included in Monro’s financial results from the respective acquisition dates. ﻿
| · |  | On February 26, 2017, we acquired 16 retail tire and automotive repair stores located in Illinois and Iowa from Nona, Inc., a Car-X franchisee. These stores operate under the Car-X name.
﻿
| · |  | On February 5, 2017, we acquired two retail tire and automotive repair stores located in North Carolina and Virginia from Thrifty Tire of Roxboro, LLC. These stores operate under the Mr. Tire name.
﻿
| · |  | On October 16, 2016, we acquired one retail tire and automotive repair store located in Rhode Island from Hamel Tire Center, Inc. This store operates under the Monro name.
﻿
| · |  | On October 2, 2016, we acquired three retail tire and automotive repair stores located in Ohio from Parkway D/C Enterprises, Inc. These stores operate under the Mr. Tire name.
﻿
| · |  | On September 19, 2016, we acquired one retail tire and automotive repair store located in Florida from Florida Tire Service, LLC. This store will operate under The Tire Choice name.
﻿
| · |  | On September 18, 2016, we acquired two retail tire and automotive repair stores located in Michigan from Davco Development Company and Ricketts, Inc. These stores operate under the Monro name.
﻿
| · |  | On September 11, 2016, we acquired 26 retail tire and automotive repair stores and one retread facility located in North Carolina, as well as four wholesale locations in North Carolina, South Carolina and Tennessee, from Clark Tire & Auto, Inc. These stores operate under the Mr. Tire name. The wholesale locations and retread facility operate under the Tires Now name.
﻿
| · |  | On July 18, 2016, we acquired one retail tire and automotive repair store located in Indiana from NTI, LLC. This store operates under the Car-X name.
﻿
| · |  | On July 17, 2016, we acquired one retail tire and automotive repair store located in Georgia from Kwik-Fit Tire & Service. This store operates under the Mr. Tire name.
﻿
| · |  | On July 10, 2016, we acquired four retail tire and automotive repair stores located in Minnesota from Task Holdings, Inc. and Autopar, Inc. These stores operate under the Car-X name.
﻿
| · |  | On June 26, 2016, we acquired one retail tire and automotive repair store located in Michigan from Harlow Tire Company. This store operates under the Monro name.
﻿
| · |  | On June 19, 2016, we acquired two retail tire and automotive repair stores located in New Hampshire from Express Tire Centers, LLC. These stores operate under the Tire Warehouse name.
﻿
| · |  | On May 8, 2016, we acquired one retail tire and automotive repair store located in Florida from Pioneer Tire Pros. This store operates under The Tire Choice name.
﻿
| · |  | On May 1, 2016, we acquired 29 retail tire and automotive repair stores and one retread facility located in Florida from McGee Tire Stores, Inc. These stores will operate primarily under The Tire Choice name. The retread facility operates under the McGee Tire name.
﻿ These acquisitions resulted in goodwill related to, among other things, growth opportunities, synergies and economies of scale expected from combining these businesses with ours, and unidentifiable intangible assets. All of the goodwill is expected to be deductible for tax purposes. We have recorded finite-lived intangible assets at their estimated fair value related to customer relationships, favorable leases and trade names. ﻿ We expensed all costs related to acquisitions during fiscal 2017. The total costs related to completed acquisitions were $1.0 million for the year ended March 25, 2017. These costs are included in the Consolidated Statements of Comprehensive Income primarily under operating, selling, general and administrative expenses. ﻿ Sales and net loss for the fiscal 2017 acquired locations totaled $104.9 million and approximately ($1.0) million, respectively, for the period from acquisition date through March 25, 2017. The net loss includes an allocation of certain traditional corporate related items, including vendor rebates, interest expense and income taxes. ﻿ Supplemental pro forma information for the current or prior reporting periods has not been presented due to the impracticability of obtaining detailed, accurate or reliable data for the periods the acquired entities were not owned by Monro. ﻿ The preliminary fair values of identifiable assets acquired and liabilities assumed were based on preliminary valuation data and estimates. The excess of the net purchase price over the net tangible and intangible assets acquired was recorded as goodwill. The preliminary allocation of the aggregate purchase price as of March 25, 2017 was as follows: ﻿ ﻿
﻿ |  |  |
﻿ |  |  |
﻿ |  | As of Acquisition Date
﻿ |  | (Dollars in thousands)
﻿Cash and equivalents |  | $ | 15
﻿Trade receivables |  |  | 6,977
﻿Inventories |  |  | 18,432
﻿Other current assets |  |  | 416
﻿Property, plant and equipment |  |  | 31,993
﻿Intangible assets |  |  | 21,394
﻿Other non-current assets |  |  | 208
﻿Long-term deferred income tax assets |  |  | 9,334
﻿Total assets acquired |  |  | 88,769
﻿Warranty reserves |  |  | 491
﻿Other current liabilities |  |  | 3,970
﻿Long-term capital leases and financing obligations |  |  | 41,011
﻿Other long-term liabilities |  |  | 1,141
﻿Total liabilities assumed |  |  | 46,613
﻿Total net identifiable assets acquired |  | $ | 42,156
﻿Total consideration transferred |  | $ | 141,807
﻿Less: total net identifiable assets acquired |  |  | 42,156
﻿Goodwill |  | $ | 99,651
﻿ The total consideration of $141.8 million is comprised of $141.7 million in cash, and a $.1 million payable to a seller. The payable is being paid via equal annual payments through September 2019. ﻿ The following are the intangible assets acquired and their respective fair values and weighted average useful lives. ﻿ ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  | As of Acquisition Date
﻿ |  |  |  |  | Weighted
﻿ |  | Dollars |  | Average
﻿ |  | in thousands |  | Useful Life
﻿Customer lists |  | $ | 11,999 |  | 13 years
﻿Favorable leases |  |  | 6,440 |  | 14 years
﻿Trade names |  |  | 2,955 |  | 17 years
﻿Total |  | $ | 21,394 |  | 14 years
﻿ We continue to refine the valuation data and estimates related to inventory, road hazard warranty, intangible assets, real estate and real property leases for the fiscal 2017 acquisitions and expect to complete the valuations no later than the first anniversary date of the respective acquisition. We anticipate that adjustments will continue to be made to the fair values of identifiable assets acquired and liabilities assumed and those adjustments may or may not be material. ﻿ Fiscal 2016 ﻿ During fiscal 2016, we acquired the following businesses for an aggregate purchase price of $51.1 million. The acquisitions were financed through our existing credit facility. The results of operations for these acquisitions are included in Monro’s financial results from the respective acquisition dates. ﻿
| · |  | During fiscal 2016, we acquired three retail tire and automotive repair stores located in Illinois and Indiana from two former Car-X franchisees. These stores operate under the Car-X name.
| · |  | On January 31, 2016, we acquired one retail tire and automotive repair store located in Georgia from Marietta Tire & Service, Inc. This store operates under the Mr. Tire name.
﻿
| · |  | On December 13, 2015, we acquired four retail tire and automotive repair stores located in Wisconsin from McMar, Inc., a former Car-X franchisee. These stores operate under the Car-X name.
﻿
| · |  | On December 13, 2015, we acquired one retail tire and automotive repair store located in Florida from Host Tires of Lakeland, Inc. This store operates under The Tire Choice name.
| · |  | On August 16, 2015, we acquired 27 retail tire and automotive repair stores located in New York and Pennsylvania from Kost Tire. These stores operate under the Mr. Tire name.
| · |  | On July 12, 2015, we acquired four retail tire and automotive repair stores located in Massachusetts from Windsor Tire Co., Inc. These stores operate under the Monro Brake & Tire name.
| · |  | On April 25, 2015, we acquired the Car-X Brand, as well as the franchise rights for 146 auto service centers from Car-X Associates Corp., a subsidiary of Tuffy Associates Corp. At the time of acquisition, the Car-X stores were owned and operated by 32 independent Car-X franchisees in Illinois, Indiana, Iowa, Kentucky, Minnesota, Missouri, Ohio, Tennessee, Texas and Wisconsin. The franchise locations operate under the Car-X name. Monro operates as the franchisor through a standard royalty agreement, while Car-X remains a separate and independent brand and business through Car-X, LLC, Monro’s wholly-owned subsidiary, with franchise operations based in Illinois.
﻿ These acquisitions resulted in goodwill related to, among other things, growth opportunities, synergies and economies of scale expected from combining these businesses with ours, and unidentifiable intangible assets. All of the goodwill is expected to be deductible for tax purposes. We have recorded finite-lived intangible assets at their estimated fair value related to franchise agreements, trade name, favorable leases and customer relationships. ﻿ We expensed all costs related to acquisitions during fiscal 2016. The total costs related to completed acquisitions were $.7 million for the year ended March 26, 2016. These costs are included in the Consolidated Statements of Comprehensive Income primarily under operating, selling, general and administrative expenses. ﻿ Sales, including franchise royalty income, and net income for the fiscal 2016 acquired locations totaled $24.8 million and approximately $1.4 million, respectively, for the period from acquisition date through March 26, 2016. Net income includes an allocation of certain traditional corporate related items, including vendor rebates, interest expense and income taxes. ﻿ Supplemental pro forma information for the current or prior reporting periods has not been presented due to the impracticability of obtaining detailed, accurate or reliable data for the periods the acquired entities were not owned by Monro. ﻿ We finalized the purchase accounting relative to the fiscal 2016 acquisitions during fiscal 2017. As a result of the final purchase price allocations, certain of the fair value amounts previously estimated were adjusted during the measurement period. These measurement period adjustments related to updated valuation reports and appraisals received from our external valuation specialists, as well as revisions to internal estimates. The changes in estimates recorded in fiscal 2017 include an increase in trade receivables of $.1 million; an increase in property, plant and equipment of $2.6 million; an increase in intangible assets of $.4 million; an increase in long-term deferred income tax assets of $1.4 million; an increase in other current liabilities of $.6 million; an increase in long-term capital leases and financing obligations of $5.8 million; and an increase in total other liabilities of $.1 million. The measurement period adjustments resulted in an increase to goodwill of $2.0 million. ﻿ These adjustments were not material to the Consolidated Statements of Comprehensive Income for the fiscal years ended March 25, 2017 and March 26, 2016. ﻿ We have recorded the identifiable assets acquired and liabilities assumed at their values as of their respective acquisition dates (including any measurement prior adjustments), with th e remainder recorded as goodwill as follows: ﻿ ﻿
﻿ |  |  |
﻿ |  |  |
﻿ |  | As of Acquisition Date
﻿ |  | (Dollars in thousands)
﻿Trade receivables |  | $ | 377
﻿Inventories |  |  | 916
﻿Other current assets |  |  | 502
﻿Property, plant and equipment |  |  | 13,785
﻿Intangible assets |  |  | 11,678
﻿Other non-current assets |  |  | 25
﻿Long-term deferred income tax assets |  |  | 6,902
﻿Total assets acquired |  |  | 34,185
﻿Warranty reserves |  |  | 184
﻿Other current liabilities |  |  | 2,202
﻿Long-term capital leases and financing obligations |  |  | 27,975
﻿Other long-term liabilities |  |  | 885
﻿Total liabilities assumed |  |  | 31,246
﻿Total net identifiable assets acquired |  | $ | 2,939
﻿Total consideration transferred |  | $ | 51,139
﻿Less: total net identifiable assets acquired |  |  | 2,939
﻿Goodwill |  | $ | 48,200
﻿ The total consideration of $51.1 million is comprised of $45.1 million in cash, and a $6.0 million payable to a seller. The payable is being liquidated via equal monthly payments through August 2022. ﻿ The following are the intangible assets acquired and their respective fair values and weighted average useful lives. ﻿ ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ |  | As of Acquisition Date
﻿ |  |  |  |  | Weighted
﻿ |  | Dollars |  | Average
﻿ |  | in thousands |  | Useful Life
﻿Franchise agreements |  | $ | 7,100 |  | 13 years
﻿Trade name |  |  | 2,000 |  | 15 years
﻿Favorable leases |  |  | 1,889 |  | 13 years
﻿Customer lists |  |  | 689 |  | 7 years
﻿Total |  | $ | 11,678 |  | 13 years
﻿

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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