Fitch Assigns Mavis Tire Express Services First-Time 'B-' IDR; Outlook Stable

Published: 2026-05-04 07:35:22 ET W

Published on 05/04/2026 at 07:35 am EDT

Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'B-' to Mavis Tire Express Services TopCo, Corp. and Metis HoldCo, Inc. (collectively Mavis).

Fitch has also rated Mavis' revolver and first lien term loans 'B' with a Recovery Rating of 'RR3' and its senior unsecured notes 'CCC'/'RR6'. The loans include a new $775 million secured term loan, with proceeds earmarked to redeem preferred equity. The Rating Outlook is Stable.

The ratings reflect Mavis's position as a leading tire and automotive services retailer in the U.S. non-discretionary market, with 18+ years of positive same-store sales (SSS) growth. Revenue rose to $4.6 billion in 2026 from $2.7 billion in 2022, driven by acquisitions and organic growth. These strengths are balanced against high-6x EBITDAR leverage in 2026 and negative FCF from rapid store expansion. Fitch expects EBITDAR fixed charge coverage to remain in the mid-to-high 1x range through 2029.

Key Rating Drivers

Aggressive Growth Strategy: Fitch expects Mavis to continue expanding via greenfield, brownfield, and large-scale M&A to deepen density. Management is targeting over 120 new stores in 2026, accelerating to over 160 annually in 2027-2030 toward its long-term goal of 10,000+ locations. Since the 2021 leveraged buyout, Mavis has grown to 3,619 from 1,190 locations, primarily through acquisitions including TBC (595 stores in 2023) and Midas (2025). EBITDA has more than tripled to $633 million. The Midas acquisition added about 1,200 franchise locations and an asset-light franchise royalty revenue stream; 111 were converted to company-operated stores.

The growth strategy is capital intensive, resulting in negative FCF (after growth capex) during the near to intermediate term, and new stores generating negative EBITDA during ramp-up. As with prior acquisitions, future large-scale deals are likely to be funded through additional debt and sale-leaseback transactions, which could keep Mavis' EBITDAR leverage high. Execution and integration risks persist, though Mavis has a strong track record of margin improvement across acquired brands since 2018 and mature greenfields achieving about a two-year payback period.

Margin Expansion: Fitch expects EBITDA to expand to around $750 million in 2026 from $633 million in 2025, with strong EBITDAR margins that we expect to improve by 100 to 200 bps in 2026. The acquired Midas stores could contribute an additional $60 million EBITDA in 2026 based on a full year of operations, while improving margins given its largely franchised operation. Integration synergies and maturing stores from 2022-2024 support additional near-term margin expansion.

MavOS, Mavis' proprietary operating system, could drive 100-200 bps gross margin improvement through enhanced labor deployment efficiency and inventory management, with full rollout across 1,600+ company-operated stores expected by 2026 end. EBITDAR margins could continue improving in the next few years, supported by operating leverage, private label tire penetration growth, and digital transformation.

High Leverage with Deleveraging Path: Fitch expects EBITDAR leverage to rise to the high-6x in 2026, pro forma for the $775 million term loan to redeem the convertible preferred equity, then decline gradually to the mid-6x range by 2029 through EBITDA growth rather than debt repayment. The deleveraging path could be delayed by debt-funded acquisitions, consistent with growth-oriented capital allocation. EBITDAR fixed charge coverage is high and could remain in the mid-to-high 1x range through 2026-2029.

Scaled Leader, Fragmented Market: Mavis benefits from its established position as a leading tire and automotive services retailer in the US, with around 3.4% market share and 3,619 locations across 49 states. The industry is highly fragmented with the top five players together holding less than 10% of market share, with the remainder dominated by independent operators. Mavis differentiates itself through its convenience, broad selection, competitive pricing, and high-quality customer service. Its scale provides advantages in procurement, marketing, and data-driven site selection, supporting above-industry same-store sales and unit growth.

Adequate Liquidity: Mavis had adequate liquidity of $478 million at 2025 end to support its store expansion program, comprising $83 million in cash and $395 million availability from revolver. Fitch expects negative FCF (after growth capex) during the near to intermediate term, driven by growth capex, and the increase in interest expense of around $50 million. Mavis can supplement funding through sale-leaseback transactions and revolver draws. Fitch expects management to moderate growth if liquidity tightens, with risks diminishing as the platform scales.

Non-Discretionary Market, Industry Tailwind: Automotive preventative maintenance is non-discretionary and resilient across economic cycles, with growing car counts and miles driven supporting demand. Mavis has delivered 18+ years of positive SSS. Vehicle aging and rising complexity increase repair frequency and average ticket values. EV adoption introduces modest oil change headwinds, though EVs wear tires ~30% faster due to increased weight. Oil changes are around 12% of Mavis' revenue, limiting direct exposure. Consumer trade-down to maintenance over new vehicle purchases in economic stress provides counter-cyclical support.

Parent Subsidiary Linkage: Fitch's analysis includes a strong subsidiary/weak parent approach between the parent, Metis HoldCo, Inc. and its subsidiary, Mavis Tire Express Services TopCo, Corp. Fitch assesses the quality of the overall linkage as high, which results in consolidation of the ratings. The consolidation reflects open legal ring-fencing and open access and control between the strong subsidiary and the parent.

Peer Analysis

Mavis's peers include Genuine Parts Company (GPC; BBB-/Rating Watch Negative), Asbury Automotive Group (BB/Stable), Sonic Automotive (BB/Stable) and Wayfair Inc. (B/Positive). All are leaders in their respective highly fragmented markets yet hold modest share. Mavis holds about 3.4% of the over $170 billion U.S. tire and services market.

Mavis's 2026 expected EBITDA of about $750 million exceeds Wayfair's (about $650 million) and Sonic ($560 million) and is below Asbury (about $1 billion). Mavis's gross profit of about $2 billion exceeds Asbury's and Sonic's parts and service (P&S) segment gross profit alone, about $1.5 billion and $1 billion respectively, highlighting its scale in non-discretionary services. GPC operates at a materially larger scale (about $2B EBITDA, $24 billion revenue) with automotive and industrial diversification, though is on Rating Watch Negative given its planned separation.

EBITDAR leverage is the key rating differentiator. Mavis's 2026 expected leverage of high-6x exceeds Asbury's mid-3x, Sonic's about 4x and GPC's high-3x. Wayfair serves as a 'B' rated leverage comparable at mid-4x EBITDAR leverage in 2026.

Fitch's Key Rating-Case Assumptions

Revenue increases in the mid-to-high single digits to $4.6 billion in 2026 from $4.3 billion in 2025, driven by around 120 new greenfield / brownfield store openings, mature same store sales growth in low single digit, and the added Midas franchise contribution. Revenue could continue to increase in the mid-to-high single digit in 2027-2029, supported by accelerated store openings and bolt-on acquisitions;

EBITDAR margins could expand by 100-200 bps, driven by operating leverage on the fixed cost base, continued growth of the private label tire program, and the full rollout of MavOS, partially offset by new store ramp-up costs;

Capex is expected to rise in the near to intermediate term to support the accelerated growth plan, leading to negative FCF (after growth capex), assuming neutral working capital;

EBITDAR leverage increase to high-6x in 2026, and improve toward low-6x by 2029 supported by EBITDA expansion;

Mavis's first lien term loan bears interest at SOFR plus 300 bps, and the revolver has a leverage-based floating rate, estimated at SOFR plus 250 bps. Fitch expects the new $775 million term loan could have interest rate at SOFR plus mid-300 bps. Fitch assumes a SOFR base rates of 3.5% over the forecast period. The $720 million senior unsecured notes have a fixed coupon of 6.5%.

Corporate Rating Tool Inputs and Scores

Fitch scored the issuer as follows, using our Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP):

Business and financial profile factors (assessment, relative importance): Management (bb, Moderate), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bb+, Higher), Diversification and Asset Quality (bb, Lower), Company Operational Characteristics (bb, Moderate), Profitability (b-, Moderate), Financial Structure (ccc+, Higher), and Financial Flexibility (b-, Moderate).

The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2026, 40% for the forecast year 2027 and 40% for the forecast year 2028.

B+ to CC considerations apply in our analysis and result in no adjustment.

The Governance assessment of 'Good' results in no adjustment.

The Operating Environment assessment of 'aa-' results in no adjustment.

The SCP is 'b-'.

To derive the IDR:

Application of Fitch's Parent Subsidiary Linkage Rating Criteria results in a consolidated approach.

Recovery Analysis

For issuers with IDRs of 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue ratings are derived from the IDR and the relevant Recovery Rating (RR) and notching, based on Fitch's recovery analysis. Fitch's recovery analysis assumes Mavis' value is maximized as a going concern in a post-default scenario, given a going concern valuation of approximately $3.2 billion relative to a liquidation value of around $1.1 billion.

Fitch's going concern value is derived from a projected EBITDA of around $525 million. The scenario assumes a lower revenue base of around $3.7 billion, around 20% below expected 2026 revenue, assuming mis-execution yields customer count declines. EBITDA margins could trend below projected 2026 levels, assuming the impact of lost sales on Mavis' fixed expenses are somewhat offset by cost reductions.

Fitch selected a going concern multiple of 6x, within the 4x-8x range observed for North American corporates, reflecting an assessment of Mavis' industry dynamics and company-specific factors. This is at the upper end of the 4x-6x range used in Fitch's analysis of retailers given the company's exposure to the non-discretionary tire and vehicle maintenance services.

Mavis' secured revolver and term loan are pari passu. Fitch assumes the $800 million revolver, which is secured by substantially all of Mavis' assets, would be fully drawn. After deducting 10% administrative claims from the going concern valuation, the secured debt would have good recovery prospects resulting in a 'B'/ 'RR3' rating while the unsecured notes would have poor recovery prospects, resulting in a 'CCC'/ 'RR6' rating.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Weaker-than-expected operating results, persistently negative FCF, with EBITDAR Fixed Charge Coverage sustained below 1.5x;

Financial policy decisions, including debt-financed M&A or share repurchases, resulting in EBITDAR leverage sustained above 7.5x.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Continued strong operating performance, with FCF trending towards breakeven, and EBITDAR Fixed Charge Coverage sustained above 2.0x;

EBITDAR leverage sustained below 6.5x through better-than-expected operating performance and/or financial policy actions.

Liquidity and Debt Structure

As of Dec. 31, 2025, Mavis' liquidity totaled $478.1 million, including $82.9 million in cash and equivalents, and $395.2 million available (net of LOCs) under its $800 million revolver due 2028. Fitch views Mavis' liquidity as satisfactory, taking into account the flexibility in its growth capex.

Pro forma for the transaction, total debt increases to $5.5 billion, comprising $410 million in revolver borrowings, a $3.6 billion first lien term loan due May 2028, a new $775 million non-fungible first lien term loan due May 2033, and $720 million in senior unsecured notes due May 2029. The new term loan includes a springing maturity 91 days prior to the senior unsecured notes if more than $500 million remains outstanding. Proceeds from the new term loan will fund the redemption of convertible preferred equity at Metis HoldCo, the indirect parent of the rated entity. Mavis' next material maturity is May 2028 when the revolver and existing first lien term loan come due.

Issuer Profile

Mavis is a leading independent tire and auto service retailer in the U.S. It has 2,401 company-operated retail services centers and 1,218 franchised service centers across 49 states in the U.S. and Canada.

Summary of Financial Adjustments

EBITDA is adjusted for stock-based compensation;

Lease-related interest and D&A are reclassified as operating costs in the income statement and as operating cash outflows in the cash flow statement, in accordance with Fitch's Corporate Rating Criteria;

Balance sheet lease liabilities are used as lease-equivalent debt starting in Fiscal 2023, in accordance with Fitch's Corporate rating criteria dated Dec. 6, 2024. Prior years used an 8x multiple applied to lease expense for lease-equivalent debt.

Date of Relevant Committee

29 April 2026

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.

Climate Vulnerability Signals

The Climate Vulnerability Score for Mavis for 2035 is 25 out of 100, suggesting low exposure to climate-related risks in that year.

ESG Considerations

Fitch does not provide ESG relevance scores for Mavis Tire Express Services TopCo, Corp. and Metis HoldCo, Inc.

RATING ACTIONS

Entity / Debt

Rating

Recovery

Metis HoldCo, Inc.

LT IDR

B-

New Rating

Mavis Tire Express Services TopCo, Corp.

LT IDR

B-

New Rating

senior unsecured

CCC

New Rating

RR6

senior secured

New Rating

RR3

Page

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PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

APPLICABLE CRITERIA

Corporates Recovery Ratings and Instrument Ratings Criteria (pub. 03 Aug 2024) (including rating assumption sensitivity)

Parent and Subsidiary Linkage Rating Criteria (pub. 28 Jun 2025)

Corporate Rating Criteria (pub. 10 Jan 2026) (including rating assumption sensitivity)

Sector Navigators - Addendum to the Corporate Rating Criteria (pub. 10 Jan 2026)

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

Corporate Monitoring & Forecasting Model (COMFORT Model), v8.2.0 (1)

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