TuneUp Masters for Sale, but Granatelli Says He Plans to Stay

Cardis Corp. has tentatively agreed to sell its TuneUp Masters division, but Andy Granatelli, chairman of Newbury Park-based TuneUp Masters, said he has no plans to leave the chain of auto tuneup garages.

Granatelli, a former race car owner and driver who, along with a partner, sold TuneUp Masters to Cardis in 1986, said it was too early to comment on his plans in detail because Cardis announced only a letter of intent to sell the division.

But Granatelli said, “I don’t think they’d buy the company without me, frankly.” Asked why, he replied, “I think I do a pretty good job. I have no plans on going anywhere.”

Cardis, a Cerritos-based distributor and retailer of automotive parts, bought TuneUp Masters from Granatelli’s group in a cash and stock deal then valued at up to $53 million, with at least $40 million paid in cash. Last week, Cardis agreed to sell the business to a group led by Xpert Tune, a closely held auto tuneup company based in Memphis, Tenn. TuneUp Masters operates 242 outlets, mostly in the West and Southwest.

The exact price was not disclosed, but John L. Olson, Cardis’ vice president for finance and administration, said the price would be between $50 million and $60 million.

Cardis plans to use the cash from the TuneUp Masters sale, which it expects to complete by March 31, to pay back a $44-million debt to Dresdner Bank AG of West Germany, Olson said.

The announcement of the sale agreement with Xpert Tune came five weeks after Cardis emerged from reorganization under Chapter 11 of the federal bankruptcy laws, in which it was shielded from creditors’ lawsuits while it worked out a plan to pay its bills. However, the profitable TuneUp Masters was not part of Cardis’ bankruptcy filing in May, 1988.

Until recently, Granatelli, 66, owned about 17% of Cardis’ stock. But his stake will be severely diluted to about 2% because Cardis’ reorganization calls for the company to issue millions of new shares to its creditors, Olson said.

Granatelli 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 he appeared as its spokesman in television commercials.