Three years after being acquired by a venture capital firm, Alloy Wheel Repair Specialists L.L.C. (AWRS) is ramping up a U.S. growth strategy that includes expanding the target audience into the retail tire and auto repair sector and building a network of company-owned locations in larger metro areas to complement its franchised units.
To that end, AWRS recently hired a pair of auto aftermarket veterans, Jason Yarbrough and Mike Perkins, to handle franchise relations and business development, respectively.
The company, which claims to be the world's largest full-service alloy wheel repair and replacement firm, operates through roughly 100 franchisees in 46 U.S. states and 20 more internationally, including five in Canada.
Soundcore Capital Partners L.L.C., a New York-based private equity firm that invests in lower middle market businesses, acquired AWRS in November 2015. The firm called wheel repair one of the fastest-growing sub-sectors within the auto-reconditioning market, accounting for more than $750 million in annual revenues in the U.S. alone.
Soundcore moved quickly, acquiring eight franchises in key markets in the intervening nine months. Among them was the franchise in Baltimore, which was headed by Rob Wheeley, whom Soundcore then brought in-house and installed as CEO of AWRS, which has been in business since 2001.
The capital investment firm also at that time appointed a pair of auto aftermarket industry veterans — Ken Walker, a former CEO of Meineke Car Care Centers, Driven Brands Inc. and Parts Inc., and Bill Lasky, a senior executive with Stoneridge Inc., Accuride Corp. and Affinia Group Inc. — to its board of directors. Mr. Laskey assumed the board chairmanship.
Soundcore then secured $42.5 million in financing in March 2016 through Monroe Capital L.L.C. "to support the acquisition and future growth initiatives" of AWRS.
At about the same time, former American Tire Distributors Inc. CEO William Berry joined Soundcore as an operating partner, tasked with providing management and operating expertise to Soundcore's portfolio companies, with a focus on specialty distribution and business services.
Jarrett Turner, Soundcore managing partner, said of Mr. Berry: "Our ability to provide portfolio company CEOs with guidance from someone who has faced similar challenges on a larger scale is invaluable."
As for the recent additions to the management team, Mr. Yarbrough — a former Alloy Wheel Repair franchise owner in the Birmingham, Ala., area — will assume the role as franchise relations manager, and Mr. Perkins, who has worked with three tire companies, becomes director of business development.
In his new position, Mr. Yarbrough will be the bridge between AWRS corporate and franchisees with focused efforts on maintaining a transparent dialogue that nurtures a positive relationship.
Mr. Perkins joins AWRS with 33 years of experience in the tire industry, including his most recent position as vice president of sales for Sentury Tire North America L.L.C., the U.S. subsidiary of China's Qingdao Sentury Tire Co. Ltd. He also has experience with Hankook Tire America Corp., K&M Tire and Bridgestone Americas Inc.
As director of business development, he will be tasked with generating new local and national sales initiatives that will drive revenue for both AWRS and AWRS franchisees.
Among those initiatives will be increased marketing to the independent tire retail and auto repair/maintenance sectors, which represent a great deal of potential business for AWRS and its franchisees, Mr. Perkins told Tire Business.
For now, AWRS' primary revenue sources are new car dealers and body shops, with insurance claims accounting for a large percentage of business at the latter, he said.
Mr. Perkins stressed that AWRS can be a solid business partner of tire dealers because the franchisees are mobile, able to perform most services on-site and most are able to offer same-day service.
Overall, AWRS expects demand for its services to keep growing steadily considering the trend toward alloy wheels at nearly every vehicle maker selling in North America, Mr. Perkins said.
AWRS has developed patented wheel-straightening techniques that work on both cast and forged wheels, along with proprietary refinishing techniques that are OSHA compliant, Mr. Perkins said. The AWRS mobile units can handle mounted wheels up to 24 inches in rim diameter and even larger if unmounted.
AWRS does not work on chrome wheels, Mr. Perkins said, owing to resurfacing issues.
Mr. Perkins noted that AWRS recently became the official wheel repair partner for General Motors Co. dealers, a development that has opened the door to developing a viable repair procedure for carbon-fiber wheels, which are used on the Chevrolet Corvette.
In addition to the mobile units that perform wheel repair on-site at customer locations, there are 28 regional wheel remanufacturing plants, six of which are operated by AWRS. Prior to Soundcore's purchase of AWRS, all were operated by franchisees, but part of Soundcore's reason in acquiring key franchisees was to bring this business in-house to shore up the company's corporate revenue stream.
AWRS said its wheel remanufacturing service is the preferred solution for wheels with extensive damage, cracks/missing metal or have special finishes. The firm offers free pickup and delivery service and typically operates with a 24-hour turnaround.
The acquired franchises are in Atlanta; Baltimore; Indianapolis; Las Vegas; Westchester and Danbury, N.Y.; and Newtown, Conn.
For wheels damaged beyond repair, AWRS can offer a replacement OEM wheel through its network of wholesale partners.
