Les Schwab Tire Owner Considering Sale Valued at Over $7 Billion, Sources Indicate

By Abigail Summerville

NEW YORK – The investment firm Meritage Group, which owns Les Schwab Tire Centers, is considering several options, including a potential sale of the tire retail chain. This sale could be valued at over $7 billion when accounting for debt, according to sources familiar with the situation.

Meritage has engaged Goldman Sachs to initiate the sale process for Les Schwab Tire, which is anticipated to attract interest from private equity firms and other tire retailers. However, the sources, who preferred to remain anonymous due to the confidential nature of the discussions, cautioned that a deal is not certain.

Meritage Group, founded by billionaire Nat Simons after his departure from hedge fund Renaissance Technologies in 1997, purchased Les Schwab Tire from its family owners in 2020 for roughly $3 billion.

Bend, Oregon-based Les Schwab Tire, which was established in 1952 by Les Schwab, also known as the "Tire King," operates over 500 locations across 13 states in the Western U.S. and employs more than 7,000 people. The company sells tires and other automotive components and provides various auto services, making it one of the largest tire retailers in the U.S., alongside others like Mavis Tire and Discount Tire, which are also privately held.

Private equity firms have historically been active in the tire and automotive sectors due to the consistent cash flows generated by these businesses, which are viewed as relatively resilient during economic downturns and not heavily affected by online retail competition.

In 2021, buyout firms BayPine and TSG Consumer Partners acquired Mavis Tire for over $6 billion.

Meritage currently manages approximately $12 billion in assets as of January this year, investing in public and private equity, credit, and real estate. Its offices are located in New York City, San Francisco, and Greenwich, Connecticut.