Oregon tire company Les Schwab sold to California investors
Les Schwab Tires announced Tuesday an agreement to sell the company to an out-of-state investment firm called Meritage Group.
The firm has offices in California, Connecticut and New York, according to its website, and began investing in 1997 in public and private equity, credit and real estate.
"The decision to sell has always been about securing the long-term success of the company," Les Schwab Chief Executive Officer Jack Cuniff said in a statement. "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."
Meritage Group also owns the Portland-based beverage distributor Columbia Distributing, which it acquired in 2012, according to a news release.
"We see Les Schwab Tires as an ideal investment," Aubrey Barth, managing director of Meritage Group, said in a statement. "The company's exceptional employees and programs, strong financials, and respected, customer-focused brand set it up for success for years to come."
Central Oregon businessman Les Schwab founded the tire company in 1952 in Prineville. The business owner, who is widely respected in the Crook County community, had a vision of basing his business on building people. In a video tribute to Schwab created in 2008, one year after his death, Schwab is shown stressing his desire to build his business through building people.
"Build people — that is the most important part of your job," he stated. "Program and people, that's what built our business."
Les Schwab Tire Centers are known for their enthusiastic customer service, where staff rush to greet each vehicle. The company has more than 7,000 employees across Oregon, Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming.
The company was headquartered in Prineville for much of its existence, but its headquarters were moved to Bend in 2008.
Les Schwab Tire Centers announced in late December that it was considering selling the Central Oregon-based company. Chief Executive Officer Jack Cuniff said the board and shareholders, who are all relatives of founder Les Schwab, decided to seek new ownership.
"Given the complexities of a fifth-generation family business and managing a company of our size, we are at an important point in the life of Les Schwab Tire Centers. As our family grows and ages, it is increasingly critical to us that ownership remain committed to and aligned behind our grandfather's vision," the Schwab family said in a statement released to its employees and the public.
"After careful review and a lot of consideration, we concluded a new ownership group will help ensure future opportunity for our wonderful employees and secure continued success for the company as it grows," the statement continued. "We believe a new owner — one with deep experience and resources — will carry forward the Les Schwab vision far into the future.
"Our incredible tire centers, and the company and communities we have built together, make us proud. As hard as it is to make the decision to sell this company, we are confident it will offer tremendous opportunity to build on all we have accomplished together for our customers, communities and our employees. We are excited to see what the future will bring."
Employees were notified of the intent to sell in a companywide email sent by Cuniff shortly after plans were publicly announced.
"We believe bringing new ownership is the best way to honor Les' vision for the company and support its growth and innovation," he told employees. "The Les Schwab family are responsible stewards, and the decision to sell the company was made after much consideration. It was not made lightly."
He went on to acknowledge that they expected employees to have many questions about this news, then and in the coming months.
"There will be things we know, but many more things we do not," he stated. "What I do know is our outstanding employees, our programs and our customers are what make this company valuable. A new owner will want to take advantage of all three and drive this company to even greater success in the future. I am excited to be a part of this transition with all of you."
The company hired Goldman Sachs Group Inc. to represent Les Schwab in the sales process.
The company worked with an adviser to weigh alternatives such as divesting its real estate portfolio, which is worth at least $2 billion. The company has $1.8 billion in annual revenue and 490 locations in 10 states.
Sale of the company was not something that Schwab envisioned happening. In a 2008 tribute video, several clips showed the company founder talking about his desire to "see the company go on for several more generations."
"Our company is not for sale," he said in one of the clips. "It is going to be here for several generations after I am gone."
The sale is expected to be complete by the end of the year. Neither group has disclosed the purchase price.
Les Schwab said its operations and management team will remain the same.
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