Deal due for completion by end of year; price, terms not disclosed
BEND, Ore. (KTVZ) – Bend-based Les Schwab Tire Centers – which calls itself "the nation’s highest-ranked, most customer-focused tire retailer" – has reached an agreement to sell the company to family-owned investment firm Meritage Group, Les Schwab Chief Executive Officer Jack Cuniff said Tuesday.
While terms were not disclosed, when one of the most iconic Central Oregon-born companies and the region's third-largest private employer put itself up for sale late last year, analysts said a deal could fetch up to $3 billion.
“The decision to sell has always been about securing the long-term success of the company,” Cuniff said in a news release, which continues below.
“Meritage Group has a history of preserving culture and values while growing its companies with investment over time. This is a great fit, and aligns well with Les’ vision and all we have built together,” Cuniff said.
Les Schwab’s board of directors and its shareholders, who are all relatives of founder Les Schwab, announced last December their decision to seek new ownership for the company. They cited the complexities of operating a family-owned business with five generations of family members, as well as the company’s strong position, as factors prompting the decision.
The sale process was delayed and even suspended in late June due to the difficulties posed by the COVID-19 pandemic's travel and other restrictions.
The Schwab family shareholders said this week in a joint statement: “As our family grows and ages, it has been very important to us to remain committed and aligned behind our grandfather’s vision. While it was hard to make the decision to sell the company, we are very confident Meritage Group will continue that commitment and alignment, and will build on all we have accomplished over the past 68 years.”
The future is bright for Les Schwab with Meritage Group taking over ownership of the company, the family said.
“We are thrilled with this outcome,” they said. “The company’s long-term outlook, the opportunities for employees, and the tremendous importance of our customers will remain as Grandpa always imagined.”
Meritage Group, a family-owned private investment firm founded by Nat Simons, invests in public and private companies across a variety of sectors. It continues to own to this day Portland, Oregon-based national beverage distributor Columbia Distributing, which it acquired in 2012.
“We see Les Schwab Tires as an ideal investment,” said Aubrey Barth, managing director of Meritage. “The company’s exceptional employees and programs, strong financials, and respected, customer-focused brand set it up for success for years to come.”
“It only took reading 50 pages of Les' book to realize the Company was a great cultural fit for Meritage,” said Alex Magaro, co-president and senior managing director of Meritage.
Les Schwab’s operations and management team will remain unchanged, the companies said. The sale is expected to be completed by the end of the year. The purchase price and terms of the transaction were not disclosed.
About Les Schwab
Les Schwab Tire Centers (www.lesschwab.com) is one of the leading independent tire dealers in the United States, with more than 7,000 employees with nearly 500 locations throughout Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming. In August 2019, leading national consumer magazine Consumer Reports rated Les Schwab the No. 1 tire retailer. Also in 2019, J.D. Power awarded Les Schwab No. 1 in Customer Satisfaction in both the Tire Replacement and Aftermarket General Maintenance surveys.
The company has been recognized for its business practices through several awards, including a Milestone award from the Oregon Sustainability Board; Oregon Economic and Community Development Department honors; an Environmental Excellence award from the Association of Washington Business; an Integrity Counts award from the Northern Idaho Better Business Bureau; and The Oregonian 2012, 2013, 2014, 2015 and 2016 Top Workplace recognition.
About Meritage Group LP
Meritage Group LP is a family-owned private investment firm founded by Nat Simons with assets under management in excess of $10 billion as of December 31, 2019.
Meritage began investing in 1997, and pursues investment strategies in public and private equity, credit, and real estate that are generally fundamentally oriented and longer-term in their investment horizon.
Meritage Group LP has offices in San Francisco, Greenwich, and New York City and currently has a team of approximately 50 people.
Les Schwab Tire Centers Background Information
Les Schwab Tire Centers (www.lesschwab.com), headquartered in Bend, Oregon, is one of the leading independent tire dealers in the United States. The company has more than 7,000 employees in about 500 locations throughout Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming.
Les Schwab founded the company bearing his name in 1952 and quickly established a reputation for outstanding customer service. The first Les Schwab stores were opened in small towns and rural communities with one guiding principle – provide your neighbors with outstanding customer service and high-quality products. This single-minded focus on servicing customers continues today. “Pride in Performance,” a slogan coined by the founder explains each employee’s commitment to providing the best tire value and always delivering world-class customer service.
Les Schwab is recognized for several innovative business practices. It pioneered the concept of offering a supermarket selection of tires in its showrooms – allowing customers the opportunity to inspect and select the exact tires they want. For over 50 years, the company has stood behind its products and services by providing customers with written warranties on tires, brakes and other products.
Other innovations include industry leading employee recruitment and retention programs. Les Schwab believes world-class customer service starts with employees who are powerfully motivated to serve. The company incentivizes employees who put the customer first with opportunities to advance within the organization and provides online and hands-on training to help them hone their skills. Through its long-standing policy to promote from within, every hourly employee has the opportunity to be promoted to store management.
Les Schwab’s employee rewards program exceeds any other in the retail tire industry. The company established its first profit share program in 1954, and today shares approximately half of its profits with employees through generous health benefits, bonus and retirement programs.
At Les Schwab, the commitment to service is threefold – service to customers, to employees and to communities. The company is recognized for its volunteer efforts, sponsorships, local environmental and business practices. In August 2019, leading national consumer magazine Consumer Reports rated Les Schwab the No. 1 tire retailer. Also in 2019, J.D. Power awarded Les Schwab No. 1 in Customer Satisfaction in both the Tire Replacement and Aftermarket General Maintenance surveys. The Company has received several additional awards, including: a Milestone award from the Oregon Sustainability Board, Oregon Economic and Community Development Department honors, an Environmental Excellence award from the Association of Washington Business, an Integrity Counts award from the Northern Idaho Better Business Bureau, and The Oregonian Top Workplace recognition every year from 2012-2018.
Les Schwab Tire Centers Fast Facts
Number of Stores: About 500 (September 2020)
Retail Sales: $ 1.8 Billion (September 2020)
Number of Employees: More than 7,000
Locations: Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming
Company Headquarters: Bend, Oregon
20900 Cooley Road
Bend, Oregon 97701
Key Officers: Jack Cuniff, Chief Executive Officer
John Robertson, President of Store Operations
Corey Parks, Chief Administration Officer
Dale Thompson, Chief Marketing Officer
Recent Awards &
Recognition: #1 Ranked Tire Retailer – Consumer Reports, 2019
No. 1 in Customer Satisfaction in both the Tire Replacement and Aftermarket General Maintenance surveys – J.D. Power, 2019
People’s Choice Award – The Fresno Bee, 2018
People’s Choice Award – Tri-City Herald, 2018
Oregon Ethics in Business Award – Rotary Club of Portland, 2018
Top Work Places in Oregon and Southwest Washington – Oregonian, 2012-2018
Heart of Community Award – Hands on Greater Portland, 2013
Better Business Bureau Integrity Counts! Honoree, Snake River Region – Idaho Better Business Bureau, 2010
Environmental Excellence Award – Association of Washington Business, 2008
Best Places to Work – Oregon Business Magazine, 2008
Governor’s Gold Award – Oregon Governor Ted Kulongoski, 2003
Best Passenger-Vehicle and Light-truck Tire Retailer – J.D. Power, 2000-2003
Family Business Award – Oregon State University, 2002 Tire Dealer of the Year – Modern Tire Dealer, 2000
Digital Channels: Website: lesschwab.com