BEND, Ore. — One of the largest independent tire dealerships in the U.S. could be on the market — again.
According to a report by Reuters, Meritage Group L.P., a California- and New York-based investment group, is considering selling its stake in Les Schwab Tire Centers, which it acquired in late 2020 for a reported $3 billion.
Sources told Reuters that the retail chain, which operates 550-plus locations in 13 mostly Western states, employing more than 8,500, could be valued at more than $7 billion, including debt.
The news organization said that Meritage Group has enlisted investment bankers from Goldman Sachs & Co. L.L.C. to initiate a potential sale. Other private equity groups and other tire retailers are among those who may show interest.
Reuters said its sources cautioned that there is no guarantee of a sale.
Bend-based Les Schwab has not responded to requests for comment.
According to Tire Business data, Les Schwab Tire Centers is considered the fifth largest independent tire retail dealership in the U.S., behind Icahn Automotive/Pep Boys and ahead of Sun Auto Tire & Service. The company posted sales of $2.14 billion in 2022.
Meritage Group is a family-owned private investment firm with assets under management in excess of $12 billion. Climate activist and noted investor Nat Simons founded the firm in 1997. Meritage pursues investment strategies in public and private equity, credit and real estate.
Meritage Group has offices in San Francisco, Greenwich, Conn., and New York City.
Simons manages Meritage Group, which was spun out of Renaissance Technologies, where he was a principal. He also is co-founder, together with his wife, Laura Baxter-Simons, of Sea Change Foundation, a private family foundation dedicated to addressing global climate change.
Reuters said sources indicated that Les Schwab Tire could be valued at 15 times its earnings before interest, taxes, depreciation and amortization (EBITDA) of about $500 million.
The previous owners of Les Schwab Tire Centers, all relatives of founder Les Schwab, disclosed plans in December 2019 to sell the company, which is in its 68th year of existence.
Among the equity groups with a primary stake in tire dealerships are Mavis Discount Tire (BayPine L.P.; TSG Consumer Partners LP; and West First Management); Sun Auto & Tire (Leonard Green & Partners); and Big Brand Tire (Percheron Capital ).
