Tire King’s Family Weighs $3 Billion Les Schwab Sale

(Bloomberg) -- Les Schwab Tire Centers is exploring options including an outright sale, which could fetch at least $3 billion, according to people with knowledge of the matter.

The independent retailer is working with an adviser as it weighs alternatives including divesting its real estate portfolio, which is worth at least $2 billion, said the people, who asked not to be identified because the matter is private. Representatives for Les Schwab, based in Bend, Oregon, couldn’t be reached immediately for comment.

The company, founded in 1952, traces its roots to a single store in central Oregon owned by Les Schwab, who died in 2007. Schwab’s wealth was self-made: He and two siblings grew up in a two-room shack in a logging camp, and both their parents died when Schwab was a teenager, according to the Oregonian. He started his career selling and distributing newspapers before switching to retailing by buying a floundering Prineville tire shop with just one employee.

Schwab, dubbed the tire king, started transferring ownership of the business to his descendants in 1974, according to the Oregonian, which cited a memoir.

Now led by Chief Executive Officer Jack Cuniff, Les Schwab Tire Centers has $1.8 billion in annual revenue, according to a November 2018 interview with the Bend Bulletin. The retailer has more than 450 locations across 10 states, including Washington, Oregon and California. It previously entertained suitors including KKR & Co. and French tire magnate Francois Michelin, the Oregonian reported in 2006.

Private equity firms have continued to invest in tire and auto-focused retailers, in part because they have been less disrupted by the rise of e-commerce. In late 2018, Bain Capital agreed to invest in Dealer Tire, and earlier this year Greenbriar Equity Group LP acquired Evans Tire & Service Centers. Industry giants, meanwhile, have snapped up smaller rivals, with Goodyear Tire & Rubber Co. agreeing last week to buy Evansville, Indiana-based Raben Tire Co. for an undisclosed amount.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Daniel Taub, Pierre Paulden

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