Les Swab Tire Centers has reached a deal to sell the company to an investment fund in California called Meritage Group, which is ending a local family ownership of one of Oregon’s most well-known businesses.
Band-based Swab Tire announced that it would be looking for a buyer for the 68-year-old business in December, citing difficulties in its fifth-paid family-owned business. Tire Baron Les Swab started the business in his hometown of Prinville in 1952 and ranked O Reagan’s largest company with about 500 stores in 10 western states, with annual sales of 1.8 billion.
The business has been in Schwab’s family since his death in 2007.
When Schwab announced its sales plans last year, Bloomberg reported that owners expect 3 3 billion in deals. Schwab and Meritage did not disclose the terms of Tuesday’s transaction, but said the current management team will remain in place and Schwab will continue to operate as it is.
“We see less swab tires as an ideal investment,” Anne Bray Berth, managing director of Meritage, said in a statement. “The company’s exceptional staffing and programs, strong financial and respectable customer-centric brand establish it for success for years to come.”
Nat Simmons, founder of Maritage, is a billionaire investor and climate change activist. Simmons helps run a number of investment funds in addition to Meritage. It was not immediately clear how Les Schwab fit into his investment thesis.
Meritage (rhymes with “inheritance”) manages more than 10 10 billion in assets. Google, Charter Communications, Micro .ft, Salesforce and Sherwin Williams have large holdings. He also owns Columbia Distributors, a Portland beverage distributor.
“Maritage Group has a history of maintaining culture and values while its companies grow over time with investment. It’s a great fit, and fits well with the vision of the lace and what we’ve all built together, “said Jack Knife, CEO of Swab.
Les Swab Tire Centers
Ownership: Privately held by the grandchildren of Les Swab and their families. His company has agreed to sell to California-based investment company Merit Group. They expect the deal to close by the end of the year.
Stores: Reg Reagan, Washington 500 Washington, Alaska, Idaho, Montana, California, Nevada, Utah, Colorado and Wyoming 500.
Annual sales: 8 1.8 billion.
The sale of Schwab tires is the latest in a series of sales of large, reg Reagan-based businesses. Precision castparts, guided graphics and Vigor Industrial Industrial, among many others, have found new owners over the years.
Reg Reagan now has some large, locally owned companies located here. It’s a trend that has worried economists for years, fearing that out-of-state owners will cut off satellite operations in recession before streamlining their headquarters.
When he announced the sales plans, however, Schwab maintained that any new owner would keep the company together and retain its band headquarters and Princheville distribution center.
“As our family grows and in the age it is very important for us to be committed and aligned behind our grandfather’s vision,” the Schwab family said in a statement Tuesday. “While it was difficult to decide to sell the company, we are very confident that Meritage Group will continue that commitment and alignment, and build on what we have achieved over the past 68 years.”
Meritage has a very low profile as an investment firm with very few records of its investment philosophy or management systems. If Schwab has sold out to a competitor, the new owner can operate seamlessly, cutting jobs at the company’s band headquarters and connecting its Princville distribution center with facilities elsewhere.
Investment companies like Maritage can make a profit from Schwab by investing more money to grow the business, change operations or reduce costs. Meritage said Tuesday it plans to invest in Schwab but Dave Garten, who teaches business strategy at Portland State University, said it was impossible to predict the new owner’s intentions without knowing about the objectives and methods of the new venture.
“Financial investors have many different purposes.” Said Garrett. “So we’re spitting on the possibilities but we don’t know yet.”
Ed Maletis was part owner of Columbia Distributing, and he served on its board, when the Portland company sold Meritage in 2012. On Tuesday, he said Maritage has proved to be a good owner for his old company and Maletis said he expects him to behave like Schwab. Leaving the road, management and operations intact.
“What Maritage brings as an owner is a significantly larger checkbook that should also arise for opportunity or further development and / or acquisition,” Maletis wrote in an email. “This has benefited Columbia employees and I expect it to be the same for Les Schweb employees.”
Neither Schwab nor Maritage said anything about the structure of the deal. Last sales of leading reg Reagan businesses, especially G.I. It was the debt of debt that sent the company into bankruptcy when the Great Depression hit.
Schwab Tire suspended its sales plan in June citing a coronavirus epidemic. And while the virus is still rampant, financial markets have remained unexpectedly strong and corporate dealmaking has grown rapidly.
As his tire business grew, Les Schwab stuck to his old-school business. The company pays half of the profits from each store to its employees (Schwab said profit sharing will continue on Tuesday) and only managers are hired from within the company. The tire chain has expanded as far east as Southern California and Denver, but all of its products still pass through the desert highlands, 36 miles northeast of the band, from its Pineville warehouse.
The tire jockey still participates from the service base when the car lands in the parking lot to greet customers. The company always fixes free flats, expecting people to come back when it comes time for their new tires.
Les swab timeline
1917: Les Schwab was born into the band. He was schooled at the Brooks Scanlon logging camp, in a railroad box box with cut holes on the side. They had three newspaper delivery routes, picking up papers from the log train and delivering The Reg Region, The Reg Reg Journal and Merge News Telegram at noon.
1936: At the age of 18, Dorothy marries Schwab.
1952: Les Schwab, 34, buys an OK rubber welders tire shop in Prinville with a 11 11,000 loan from his sister-in-law and ઘર 3,500 to sell his home and borrow on his life insurance. At the time, Schwab said later, he never fixed flat tires. Sales went up int 155,000 the following year. In three years Schwab built the band and Les Swab Tire Centers in Madras.
1971: Son Harlan Schwab died at the age of 31 in a car wreck.
1980: Schwab Tire has 71 stores.
1983: Phil Vick Schwab took over as chairman of Tire but Les Schwab is closely involved in the business.
1986: Schwab Tire opens its 100th store.
2004: Schwab tires hit 1 1 billion in annual sales.
2005: Marie Denton, Les Schwab’s surviving child, died of cancer.
2007: Les Swab died at the age of 89.
2008: Schwab Tire moves from its headquarters in Princheville to the band.
2016: Dorothy Swab has died at the age of 98.
2019: Schwab Tire has a gold broker for sale as a business broker.
Schwab himself vowed that he would never sell the business and hopefully his successors would not either.
In 1997, Oregon said the company was not for sale. “It will be bigger and better than before, and it will continue to give young people a chance to succeed. All the stock will be in our family. ”
However, both of Schweb’s children had already died. However, some of his heirs serve on the board of a privately run company, no company has executive positions, and none of his four grandchildren live in Reagan.
While his widow, Dorothy Swab, died in 2016 at the age of 98, her death list had 17 direct descendants.
Explanation: This article originally described marriage as a hedge fund, as described by Bloomberg and other financial publications. But it is not clear whether Maritage hedges its investments. So the description of the pay firm has changed.