In the USA, the tire network is sold for $7 billion

Meritage Group has brought in Goldman Sachs to start the sale process of the US tire chain Les Schwab Tire Centers, which is expected to attract interest from private equity firms and companies that also engage in retail tire sales, Reuters reports, citing its sources.

Meritage Group was founded by billionaire Nate Simmons after he left hedge fund Renaissance Technologies in 1997, and Les Schwab Tire was acquired in 2020 for an estimated $3 billion. According to sources, the company's value may now be equivalent to 15 times its earnings before taxes, interest, and depreciation, or over $7 billion.

Currently, the Les Schwab Tire network, created by the "tire king" Les Schwab in 1952, includes over 500 centers in the western United States, with a staff of over 7,000 employees. The company offers tires and other auto components, as well as car maintenance services, and is one of the largest retail tire sellers in the country, along with companies like Mavis Tire and Discount Tire.

Reuters adds that private equity firms are traditionally interested in acquiring assets in the tire and automotive industries due to the "stable cash flows generated by such businesses, which are considered relatively resilient to the impact of recession." Mavis Tire was acquired by BayPine and TSG Consumer Partners in 2021 for over $6 billion.

As of January 2024, Meritage managed assets worth around $12 billion, with the company's offices located in New York, San Francisco, and Greenwich (Connecticut).