Link to Owner Dr. Robert B. Pamplin Jr.

FONT

MORE STORIES


Iconic Prineville company sells to California hedge fund run by top clean tech investment firm.

PMG FILE PHOTO - A California billionaire clean energy investor is behind the purchase of Central Oregon's Les Schwab Tire Centers. Meritage Group LP purchased the company on Tuesday, Sept. 29.The San Francisco hedge fund that purchased Central Oregon's Les Schwab Tire Centers is run by a California billionaire who invests heavily in clean technology and companies battling climate change.

Les Schwab's board and shareholders announced Tuesday, Sept. 29, that the Oregon company had been sold to Meritage Group LP. The company has been investing since 1997 in public and private ventures. It has offices in California, New York and Connecticut.

Tire company officials did not disclose the sale price. The sale is expected to be complete by the end of the year. Les Schwab said its operations and management team would remain the same.

Company Chief Executive Officer Jack Cuniff said in a statement that Les Schwab's board decided to sell to Meritage to "secure the long-term success of the company."

"Meritage Group has a history of preserving culture and values while growing its companies with investment over time," Cuniff said. "This is a great fit and aligns well with Les' vision and all we have built together."

A top eco-innovator

NAT SIMONSLAURA BAXTER-SIMONSMeritage is a $10 billion hedge fund managed by Nat Simons and Laura Baxter-Simons, a husband and wife team that also operate Prelude Ventures of San Francisco. Since 2009, Prelude Ventures has invested in clean technology and clean energy companies. Its portfolio includes Greenlight Biosciences, Element Energy, Climax Foods and transportation company Lime, which provides electric scooters in cities across the nation.

In addition, Simons and Baxter-Simons are head of the Sea Change Foundation, a family-owned organization with about $225 million in assets. The foundation donates to various environmental causes. In 2017, they both signed Bill Gates' Giving Pledge to donate a majority of their wealth.

Nat Simons is the son of billionaire California investor James Simons, who started Renaissance Technologies. Nat Simons has been named one of Fortune Magazine's top 25 eco-innovators.

Meritage Group also owns the Portland beverage distributor Columbia Distributing, which it acquired in 2012.

"We see Les Schwab Tires as an ideal investment," said Aubrey Barth, Meritage Group managing director, 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."

According to national research, the worldwide automobile tire market was worth about $112 billion in 2019. It's expected to grow to about $154 billion by 2027.

The passenger car market is worth about $80 billion, with a potential to hit $110 billion by 2027.

Carrying the Les Schwab vision

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.

CENTRAL OREGONIAN - Les Schwab Tires reached an agreement to sell the company to an out-of-state investment firm called Meritage Group.Les Schwab Tire Centers announced in late December that it was considering selling the company. 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 to its employees. "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. 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."

'Here for generations'

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."

Cuniff said the company expected employees to have many questions about the news. "There will be things we know, but many more things we do not," he said. "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.

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."

Pamplin Media Group reporter Kevin Harden contributed to this story.


You count on us to stay informed and we depend on you to fund our efforts. Quality local journalism takes time and money. Please support us to protect the future of community journalism.


RELATED STORIES

- FFA, Les Schwab work to end hunger

- Les Schwab Tire Centers considering sale of the company


Go to top
JSN Time 2 is designed by JoomlaShine.com | powered by JSN Sun Framework