Cardis Corp. said Wednesday that it completed the purchase of Tuneup Masters, a garage chain controlled by former race car driver Andy Granatelli, in a cash-and-stock deal worth as much as $53.4 million.
Cardis, which announced plans in June to buy the 227-outlet tuneup chain, disclosed that it will pay at least $40 million in cash and possibly $5 million more if Tuneup Masters achieves specified profit goals.
The Beverly Hills-based automobile parts distributor also will pay 960,000 shares--16.6% of its outstanding stock--to Granatelli, who owned 82% of Tuneup Masters.
In trading on the American Stock Exchange, Cardis’ stock closed Wednesday at $8.75 a share, unchanged from the day before. At that price, the stake acquired by Granatelli is worth $8.4 million. Under the deal, $7 million of the cash payment will go to Tuneup Masters’ founder and president, Jerry Dres, who owned 18% of the Woodland Hills-based chain, Cardis Chairman Jack Salzberg said.
Tuneup Masters will operate as a subsidiary of Cardis, and Granatelli will stay on as its chairman and chief executive.
Granatelli, 63, began his racing career in the 1940s and later became a sponsor and owner of race cars, including the one that Mario Andretti drove to victory in the Indianapolis 500 in 1969.
In the early 1970s, he was chief executive of STP Corp., a maker of oil and gasoline additives, and often appeared as its spokesman in television commercials.
Profitable in Year
Previously, Granatelli refused to release any financial data about Tuneup Masters. Salzberg disclosed, however, that the chain had pretax earnings of $5.9 million on sales of $46.5 million in the fiscal year ended Sept. 30, 1985.
During the nine months ended June 30, it posted pretax earnings of $7.6 million on revenue of $39.7 million.
The chain has outlets in California, Texas, Arizona, Nevada, Oklahoma, New Mexico, Utah and Louisiana.
Cardis, one of the nation’s biggest distributors of auto parts, earned $1.2 million on sales of $130 million in the fiscal year ended Oct. 31, 1985.
The company said it received $45 million in financing from the New York branch of Dresdner Bank AG, a West German banking concern, for the acquisition.